Protest challenging the agency’s cost realism evaluation of awardee’s proposal is denied where the agency’s workpapers demonstrate that the conclusions reached by the evaluators were reasonable.

Protest challenging the evaluation of technical proposals is denied where the record establishes that the agency’s evaluation was reasonable and consistent with the evaluation criteria.

Protest challenging the agency’s evaluation of past performance is denied where the record establishes that the agency properly considered the relevance of the protester’s references when deciding what weight, if any, to give each reference.

General Counsel P.C. Highlight:

IMRG first protests that PBGC failed to perform a proper cost realism evaluation of Randstad’s proposal. The protester contends that both applicable procurement regulations and the RFP required the agency to perform a cost realism analysis to determine the extent to which an offeror’s proposed costs represent what the government realistically can expect to pay for the proposed effort. By contrast, IMRG argues, PBGC conducted nothing more than a cursory examination of the awardee’s proposed costs, and failed to submit any evidence supporting the conclusion that no exceptions to Randstad’s proposed direct or indirect labor rates were warranted. The protester maintains that the agency’s failure to reasonably determine Randstad’s realistic costs adversely affected the agency’s resulting source selection decision. GAO states that when an agency evaluates proposals for the award of a cost-reimbursement contract, an offeror’s proposed estimated cost of contract performance is not considered controlling since, regardless of the costs proposed by the offeror, the government is bound to pay the contractor its actual and allowable costs. Consequently, a cost realism analysis must be performed by the agency to determine the extent to which an offeror’s proposed costs represent what the contract costs are likely to be under the offeror’s technical approach, assuming reasonable economy and efficiency. A cost realism analysis is the process of independently reviewing and evaluating specific elements of each offeror’s cost estimate to determine whether the estimated proposed cost elements are realistic for the work to be performed, reflect a clear understanding of the requirements, and are consistent with the unique methods of performance and materials described in the offeror’s proposal. An offeror’s proposed costs should be adjusted when appropriate based on the results of the cost realism analysis. GAO’s review of an agency’s cost realism evaluation is limited to determining whether the cost analysis is reasonably based and not arbitrary, and adequately documented.

The RFP instructed offerors that their cost proposals were to include breakdowns of labor hours, direct and indirect labor rates, and other costs, and stated that the agency’s evaluation of an offeror’s proposed costs would include consideration of the extent to which it reasonably reflected the offeror’s proposed technical approach. IMRG argues that PBGC failed to perform a proper cost realism evaluation of Randstad’s proposed direct and indirect labor rates. The protester argues that given Randstad’s much higher staffing levels than those proposed by IMRG, and the two offerors’ nearly equal overall costs, the agency should have been on notice that Randstad’s costs were probably understated. IMRG also argues that the agency’s cost evaluation report merely concludes that Randstad’s direct and indirect labor rates are realistic without demonstrating the basis for this conclusion. The fact that no exception was taken by the agency cost analyst, IMRG argues, does not substantiate the reasonableness of the agency’s conclusions. As noted above, while PBGC’s original report to GAO included only its cost evaluation report which indicated the conclusions reached, the agency later also provided the contemporaneous cost evaluator’s workpapers and underlying documentation supporting those conclusions. Randstad’s cost proposal set forth its proposed direct labor rates by labor category. The complete record reflects that the agency cost evaluator then compared Randstad’s proposed direct labor rates with the offeror’s current direct labor rates for the very individuals that Randstad was now proposing to employ for the contract here. Finding that in each instance Randstad’s proposed labor rates were higher than those it was currently paying to the same employees, the agency reasonably concluded that the proposed direct labor rates were realistic. Similarly, the agency compared Randstad’s proposed indirect rates with the offeror’s current budgeted and prior actual indirect rates submissions and found the offeror’s proposed indirect rates to be consistent with these submissions. GAO has no basis to find that the agency’s conclusion that Randstad’s proposed indirect rates were realistic ones was unreasonable.

IMRG next protests the agency’s evaluation of technical proposals. Among other things, the protester maintains that two of the perceived advantages of Randstad’s proposal–its use of incumbent personnel and a superior performance monitoring plan–were not advantages at all. Rather, IMRG argues, its proposal in these specific areas was equal or superior to that of Randstad and, thus, should have received equal credit for these strengths. IMRG also contends that because the alleged technical advantages in Randstad’s proposal were not meaningful, any award decision based on these perceived advantages was unreasonable. GAO states that in reviewing an agency’s evaluation, GAO will not reevaluate offerors’ proposals; instead, GAO will examine the agency’s evaluation to ensure that it was reasonable and consistent with the solicitation’s stated evaluation criteria and applicable procurement statutes and regulations. An offeror’s mere disagreement with the agency’s evaluation is not sufficient to render the evaluation reasonable. GAO’s review of the record here shows that the agency’s evaluation of proposals was unobjectionable.

Among the RFP’s technical approach subfactors was one regarding the offeror’s proposed performance measurement and management program. Specifically, the solicitation required offerors to describe all processes, tools and controls to ensure that accepted quality levels are met or exceeded and that timely and accurate reporting of performance metrics is provided to PBGC. Also, as to the experience and qualifications of personnel factor, the agency’s evaluation was to be based on the extent to which the offeror provides qualified and experienced personnel with relevant experience to perform this contract. In its proposal, incumbent Randstad proposed its current workforce for both the key personnel and remaining staff positions. Also, with regard to the performance measurement and management program subfactor, Randstad proposed the development of a web-based Performance Excellence Tool to track metrics, report results, and objectively measure individual and team success.

After completing its evaluation of each offeror’s proposal, the TEP found Randstad’s proposal to be technically superior to that of IMRG. The evaluators concluded that the largest difference between the proposals was with regard to the experience and qualifications of personnel factor, and that Randstad’s proposal was superior because: (1) it utilized mostly incumbent personnel; (2) added a Performance Control Manager as well as an impressive individual to fill that role; (3) proposed an experienced Assistant Project Manager; and (4) planned staffing levels of [DELETED] people (by comparison, IMRG’s staffing level was [DELETED] FTEs). The contracting officer subsequently adopted the TEP’s findings and conclusions as the basis for her cost/technical tradeoff determination.

As a preliminary matter, the record clearly indicates that the TEP was aware that IMRG was proposing an existing performance monitoring tool while Randstad was proposing a developmental performance monitoring tool. Contrary to IMRG’s assertion, the agency did not find Randstad’s performance monitoring plan superior to IMRG’s. Rather, the agency evaluators considered Randstad’s and IMRG’s monitoring plans to be equivalent strengths under the applicable evaluation factors. Moreover, the agency did not consider Randstad’s monitoring tool to be a discriminator between the two offerors’ proposals when making its determination of technical superiority. IMRG essentially argues that the agency should have given more weight to an area in which it had a perceived advantage over Randstad. This amounts to mere disagreement with the agency’s evaluation of proposals, which does not make the evaluation unreasonable.

IMRG also argues that the agency improperly judged Randstad’s proposal as superior as to the experience and qualifications of personnel factor when IMRG also proposed the use of incumbent personnel. GAO finds no merit to the protester’s assertion here. As set forth above, the TEP considered each offeror’s proposed use of the incumbent Randstad workforce to be an evaluation strength. Nonetheless, when determining the relative technical merits of the offerors’ proposals, the TEP properly considered the fact that Randstad currently employed the incumbent workforce, while IMRG had merely established a stated goal of capturing 98 percent of the incumbent workforce. It is reasonable, GAO thinks, for an agency to distinguish between the actual existing situation (i.e., that Randstad currently employs the incumbent workforce) and what an offeror proposes to accomplish. Moreover, the fact that the TEP considered both offerors’ planned use of the incumbent Randstad workforce to be strengths does not preclude the evaluators from recognizing that the offeror’s proposals were not in fact equal in this regard.

Finally, IMRG protests the agency’s evaluation of its past performance. Of foremost concern, the protester contends that the evaluation was unreasonable because of PBGC’s failure to consider as relevant various past performance references provided by IMRG in its proposal. IMRG argues that had the agency properly evaluated its past performance, it would have received a rating that was equal to or greater than that received by Randstad.

The RFP required offerors to provide at least three references evidencing past performance during the last 3 years that was –the same as, or substantially similar to— the services described in the PWS here. RFP sections L.8, M.3. Among the past performance information deemed relevant by the solicitation and which offerors were required to provide were the dollar value and length of prior contract efforts. Regarding the agency’s evaluation of past performance, the RFP also informed offerors that, –[w]hen discussing previous Government and/or private sector projects similar to that proposed, provide sufficient detail to convince evaluators of the relevance of the skills and objectives involved. GAO states that where a solicitation requires the evaluation of offerors’ past performance, it will examine an agency’s evaluation to ensure that it was reasonable and consistent with the solicitation’s evaluation criteria and procurement statutes and regulations. When made applicable by the solicitation, GAO reviews a past performance evaluation to determine the similarity or relevance of the past performance information considered by the agency. A protester’s mere disagreement with the agency’s judgment does not establish that an evaluation was improper.

As a preliminary matter, the agency evaluators properly considered the relevance of each of IMRG’s past performance references before deciding what, if any, weight to give it. Further, the agency’s decision not to consider relevant the offeror’s CDC Foundation, OCC, and EPA references was reasonable. As set forth above, the current solicitation involves a wide range of professional pension benefit administration support services, estimated at more than $22 million over four years and involving at least [DELETED] personnel. By contrast, the CDC Foundation reference was a $92,000, four-person contract for financial management and stipend administration services for an eight-month period. Likewise, IMRG’s OCC and EPA references involved support services (i.e., librarian, technical writer/editor, information technology, and administrative support services) and communication center services (i.e., photocopying, shipping and receiving, supplies, mail), respectively. Quite simply, the agency reasonably determined that IMRG’s references here were not similar in scope and/or size to the current solicitation. IMRG does not dispute the size and scope of its past performance references. The protester instead argues that at least four of its past performance references (presumably all but the CDC Foundation reference) were comparable in size and scope to the work described in the current solicitation. IMRG fails to show, however, how the services in its past performance references were the same as, or substantially similar to, those described in the PWS. In sum, IMRG’s argument amounts to mere disagreement with the agency’s judgment and, thus, does not establish that the past performance evaluation was unreasonable. The protest is denied.

Protest that successful vendor has an impermissible “biased ground rules” type of organizational conflict of interest is denied, where record shows that, contrary to protester’s assertion, former agency official working for successful vendor did not participate in planning the acquisition or preparing the solicitation.

Protest that agency evaluator was biased in favor of successful vendor is denied where protester presents no evidence to support its assertion and record shows that evaluator in question rated protester’s and successful vendor’s quotations consistently.

Protest challenging agency’s technical evaluation of protester’s quotation is denied where record supports agency’s evaluation conclusions, including its criticisms of protester’s quotation.

Protest challenging agency’s selection decision is denied where record reflects reasoned judgment of source selection official, and selection was consistent with terms of solicitation.

General Counsel P.C. Highlight:

Detica asserts that CNA has an impermissible OCI, and that one of the agency’s evaluators was biased in favor of CNA. In this connection, the protester asserts that an individual, who formerly was the director of the agency’s office of preparedness policy, planning, and analysis (PPPA), resigned from his position and subsequently was hired by CNA. The protester maintains that the former PPPA director was involved both in planning the subject acquisition, and in identifying funds for the acquisition. GAO states that the Federal Acquisition Regulation (FAR) generally requires contracting officers to avoid, neutralize, or mitigate potential significant OCIs in order to prevent unfair competitive advantages or the existence of conflicting roles that might impair a contractor’s objectivity. As a general matter, OCIs can be broadly categorized into three groups: biased ground rules, unequal access to non-public information, and impaired objectivity. Substantial facts and hard evidence are necessary to establish the existence of an OCI; mere inference or suspicion of an actual or apparent OCI is insufficient for GAO to sustain a protest.

GAO concludes from the evidence presented that the former director was involved in the preliminary stages of preparing the agency’s annual budget; that he was aware that the budget in its draft form included funding for some unspecified research and analysis work; that he was no longer a federal employee at the time the SPAR requirement was identified with specificity and did not participate in preparing the solicitation or SOO; and that identifying the agency’s actual requirements and preparing the acquisition package (including the SOO) was accomplished by other individuals who were not in contact with the former director. Simply stated, the evidence does not support a finding of an impermissible OCI on the part of CNA.

Regarding bias, the protester alleges no more than that the former director maintained a professional relationship with one of the agency’s technical evaluators, and that this somehow resulted in bias in favor of CNA. GAO states that government officials are presumed to act in good faith and GAO will not attribute unfair or prejudicial motives to procurement officials on the basis of inference or supposition; where a protester alleges bias, it must not only provide credible evidence clearly demonstrating bias against the protester or in favor of the successful vendor, but must also show that this bias translated into action that unfairly affected the protester’s competitive position. Detica has not met this standard.

First, as noted, the protester alleges only generally that the former director and an agency technical evaluator maintained an ongoing professional relationship. Detica’s employee’s statements are unsupported as to the nature and extent of the alleged relationship between the agency’s evaluator and the former director. In any case, even if the protester’s inferences regarding the nature and extent of the alleged relationship are correct, nothing in the record shows that this alleged relationship translated into action that unfairly affected the protester’s competitive position. In this regard, the evaluator in question assigned both firms’ quotations excellent ratings under the solution and key employee factors, and while she assigned CNA an excellent rating and Detica only a very good rating under the past performance factor, Detica has not challenged the agency’s evaluation conclusions regarding either of those ratings. GAO concludes that there is no basis for a finding of bias on the part of the evaluator in question.

In its initial protest, Detica asserted that the agency misevaluated its quotation by 1) assigning it a weakness for not including a fully developed SOW, notwithstanding that it also found that the quotation presented a clear and comprehensive technical approach; 2) downgrading it for emphasizing information technology, despite the protester’s view that this was what was called for under the solicitation; and 3) downgrading it for offering too many managers and too few analysts. GAO states first that the agency’s evaluation conclusions appear reasonable and supported by the record. In this connection, it is not GAO’s role to reevaluate quotations in response to an evaluation challenge; rather, it will examine the record to determine whether the agency’s evaluation conclusions were reasonable and consistent with the terms of the solicitation and applicable procurement laws and regulations. A protester’s mere disagreement with the agency’s evaluation judgments, without more, is insufficient to show that the evaluation was unreasonable.

Both Detica’s initial arguments, and its largely repetitive comments, fail to address the substance of the agency’s criticism of the firm’s quotation. First, a review of the firm’s quotation shows that the evaluators’ judgments were reasonable and accurate. Of the personnel identified by name in the Detica quotation, [deleted] are described as performing management-type functions; of these [deleted] are specifically described as performing duties for the firm’s proposed management cell, while the remaining [deleted] are designated as leading the analytical and reporting cell and technical development cell respectively. Of the [deleted] remaining personnel identified by name in the firm’s quotation, only [deleted] a Detica employee designated as engaged in performing analytical (as opposed to managerial or leadership) functions, while the remaining personnel are all subcontractor personnel. The agency’s conclusion appears reasonable in light of this array of managerial and analytical personnel.

Detica lastly argues that the source selection decision was unreasonable and lacks adequate documentation. Detica’s arguments focus largely on the agency’s price reasonableness determination and on the adequacy of the documentation supporting the price/technical tradeoff. Regarding the price reasonableness determination, Detica asserts that the agency failed to give meaningful consideration to vendors’ quoted rates; it maintains that, in light of the disparity between the low- and high-priced quotations, the agency was required to perform some meaningful reasonableness evaluation. GAO states that under FAR sect. 8.404, agencies are specifically advised that they are not required to independently evaluate the reasonableness of prices because, in the context of an FSS procurement, the General Services Administration (GSA), prior to awarding the firm’s underlying FSS contract, has already determined that the firms’ fixed unit or hourly rate prices are fair and reasonable. The agency here was not required to perform an independent evaluation to determine the reasonableness of the firms’ unit prices.

The record includes a table comparing the prices received and the government’s independent estimate ($18 million). While the record shows that CNA’s price was not the lowest received, nonetheless, it was below the government estimate and was found to include a level of effort comparable to that used to prepare the government estimate. GAO has no basis to question the adequacy of the agency’s price analysis or the determination that CNA’s total price was fair and reasonable.

As for the price/technical tradeoff, the protester claims the record is inadequate to justify the agency’s payment of a higher price than Detica’s. Contrary to the protester’s assertion, the record here includes adequate documentation to support the agency’s source selection. Specifically, the source selection document (SSD) includes a detailed analysis of the respective quotations’ evaluated strengths and weaknesses. Significantly, the SSD shows that the agency identified eight strengths with CNA’s quotation and no weaknesses. Among other things, the agency noted that CNA’s quotation articulated all of the task requirements in the SOO and explained their methodology in a clear and concise manner; outlined a unique SOW that tied directly to the agency’s objectives; that the firm had strong experience and a proven track record with the agency; and laid out a staffing plan that was realistic, thorough and appropriate. In comparison, the agency identified only four strengths in Detica’s quotation, and four weaknesses. All three offerors understood the problem, but only CNA’s solution was viable and responsive to the problem. Detica offered an [deleted] solution that did not achieve the larger research and data collection objective of which [deleted] was only a small part. Since the SDD details the evaluation judgments and basis for the agency’s determination that CNA’s quotation represented the best value, GAO concludes that the agency adequately documented the rationale for its source selection. The protest is denied.

Protest challenging agency’s evaluation of protester’s past performance and technical proposal is denied where record shows that the evaluation was reasonable.

General Counsel P.C. Highlight:

IMC challenges the evaluation of its past performance. In this regard, the RFP required offerors to submit information regarding relevant contracts and subcontracts performed within the four year period prior to issuance of the solicitation. IMC listed nine contracts and provided resumes for several key personnel. One listed contract was not considered in the evaluation because it was performed prior to the relevant four year period; two contracts for grounds maintenance at military bases in the U.S. were considered moderately relevant; and the remaining six contracts were deemed only slightly relevant on the basis that “the scope of work described was either unquantified or small in scope” based on the dollar value of the contracts. In this regard, the agency noted that, while the contract under the RFP is valued at approximately $25 million annually, the average annual value of all of IMC’s listed contracts was only $3.9 million. This led the PPET to conclude that there was no evidence in IMC’s proposal that IMC had performed work of the scale and level of integration of the requirement here. In addition, the PPET concluded that the key personnel resumes submitted by IMC did not “reflect a strong direct connection to the scale of work required by the GSMP,” since they either did not reflect experience with work on the same scale as the GSMP or were unclear with regard to the employee’s role in performance. Accordingly, IMC’s prior contracts were rated only slightly relevant overall. With regard to customer satisfaction, however, IMC’s performance was rated outstanding. Consistent with the scheme established in the RFP for the rating of performance risk, IMC’s slightly relevant and outstanding performance ratings resulted in an overall moderate performance risk rating.

IMC challenges the agency’s relevance assessment on the basis that its listed contracts encompassed “a larger area logistically” than does the GSMP requirement, and that the employees whose resumes it submitted had extensive experience in performing multiple contracts simultaneously over a wide geographical area, in custodial or grounds maintenance work, or in a school environment. GAO’s review of IMC’s past performance submission confirms the agency’s finding that most of IMC’s submitted references were for contracts that were significantly smaller in size and scope. As for the protester’s assertion that its submitted contracts were “geographically located throughout the United States encompassing a larger area logistically,” GAO finds nothing unreasonable in the agency’s conclusion that experience with geographically dispersed, but relatively small contracts is not equivalent to experience with contracts of similar scope, size and complexity to the requirement here.

Nor does GAO find persuasive IMC’s assertion that its submitted resumes reflect experience on the part of its proposed personnel with the management of contracts similar in scope, size and complexity to the instant requirement. However, GAO’s review of the resume indicates that the cited figure of $39 million was for total “sales” for the period from 1971 to 1993; this amount therefore clearly is not comparable to the $25 million estimated annual value of the GSMP requirement. Moreover, because this alleged experience dated from 1971 to 1993, it was not within the relevant four year period after issuance of the RFP. Similarly, the protester refers to the resume of another of its employees that it maintains reflects current performance in a school environment exceeding the size of the GSMP. The record shows, however, that this employee was not assigned a role in IMC’s proposal.

Technical proposals were evaluated under two subfactors–management and technical–encompassed by the technical factor. Under the management subfactor, offerors were required to describe their management approach with regard to a phase-in schedule, staffing plan and procedures, subcontractor management, communication, and quality control plan. Under the technical subfactor, offerors were to describe their technical approach, provide a hazardous material and waste management plan, and provide an asbestos management plan.

The technical evaluation team (TET) concluded that IMC’s proposal “contained major errors, omissions, and deficiencies,” and that IMC “did not have a clear understanding of the Government’s requirements.” Specifically, the evaluators found four broad deficiencies in IMC’s proposal: its staffing was very low, particularly for grounds maintenance and routine maintenance, and was inadequate to meet oversight requirements; its asbestos plan did not adequately address air sampling; its phase-in schedule did not meet the solicitation requirement for a 30’day phase-in period and did not address the required coordination with local agencies; and its subcontracting plan did not take into consideration all areas where subcontract work would be required. Consequently, the TET rated IMC’s technical proposal unsatisfactory and high risk.

While IMC believes its staffing should have been deemed adequate, its arguments fail to establish that the agency’s concerns were unreasonable. For example, notwithstanding IMC’s proposed cross-utilization approach, neither that approach nor the proposal of specifically allocated grounds maintenance team members, on its face, addressed the relatively small number of personnel proposed to perform this work. GAO notes, in this regard, that IMC’s proposed staffing levels were significantly lower than those proposed by the awardee–overall, while SKE proposed a total of 32 FTEs for grounds maintenance, IMC proposed only 6.61 FTEs for the same requirement. As the agency points out, IMC’s reliance on cross-utilization of personnel is a shortcoming under these circumstances, since cross-utilization presupposes that adequate staffing was proposed for routine and preventive maintenance, such that personnel would be available when grounds maintenance requirements arise. The agency found that this was not the case, and IMC has not shown otherwise.

The TET found that IMC’s quality control approach did not provide for sufficient quality control staffing to ensure adequate oversight. In this regard, the agency noted that IMC had proposed to use middle managers and workers in a quality control role, which the agency determined would not provide appropriate oversight, since the middle managers would in effect be evaluating themselves. IMC challenges the agency’s concern, noting that its proposal provided for a “quality control manager” who will instruct supervisors and managers to ensure that they exceed accepted standards of performance, and asserting that its proposal does not provide for inspections by workers below the Hausmeister-level. As noted by the agency, however, IMC’s proposal specifically abjured “separating Quality Control personnel and production personnel” and instead proposed to “empower all of the production employees as quality control staff.” GAO finds that the agency could reasonably conclude that IMC’s proposal provided for “forcing the QC function down” such that managers would be responsible for evaluating their own performance, which the agency reasonably viewed as a weakness.

The TET found that IMC’s asbestos management plan failed to address air sampling in a way that demonstrated an understanding of procedures mandated under the Asbestos Hazard Emergency Response Act of 1986 (AHERA), 15 U.S.C. sections 2651 etseq. (2006). IMC generally asserts that it provided an adequate asbestos monitoring plan. However, GAO finds that the record supports the agency’s evaluation. In this regard, the RFP required that offerors address compliance with AHERA and air sampling requirements in their asbestos management plan. IMC’s asbestos management plan was found to address air sampling in only a perfunctory way, merely stating, without elaboration, that IMC would “take air-monitoring readings in addition to those furnished by any asbestos contractor used by IMC, as a final reading to ensure the clean air quality in any asbestos removal area.” The agency noted that, among other omissions, IMC’s proposal did not address the difficulty of following required air sampling protocols in Germany; in that country, there is no legal requirement for Transmission Electron Microscopy testing and, therefore, there are few, if any, laboratories in Germany to perform the necessary tests, resulting in the need to send most samples to the U.S., with appropriate accountability. Given IMC’s failure to address this issue, GAO thinks the agency could reasonably find IMC’s asbestos management plan to be inadequate. The protest is denied.

Agency reasonably evaluated and rejected the protester’s quotation as technically unacceptable where the protester submitted an ambiguous quotation that failed to comply with a material specification requirement in the solicitation.

General Counsel P.C. Highlight:

4D challenges the evaluation and rejection of its quotation as technically unacceptable for failing to comply with the RFQ specification requiring a minimum sustained bandwidth for the system of 4 Mbps. 4D complains that had the agency considered its quotation in its entirety, the agency would have concluded that its quoted system satisfied the referenced RFQ specification. GAO states that in reviewing protests of an agency’s evaluation, GAO does not reevaluate vendors’ quotations; rather, it reviews the record to ensure that the agency’s evaluation was reasonable and consistent with the terms of the solicitation. Clearly stated solicitation technical requirements are considered material to the needs of the government, and a quotation that fails to conform to such material terms is technically unacceptable and may not form the basis for award. A vendor is responsible for affirmatively demonstrating the merits of its quotation and risks the rejection of its quotation if it fails to do so. Here, GAO finds that the agency reasonably evaluated and rejected 4D’s quotation as technically unacceptable.

As stated above, the RFQ required a vendor to show how [its] system [would] meet the requirements of the specification. 4D failed to unambiguously demonstrate that its quoted system would satisfy the RFQ’s minimum sustained bandwidth specification of 4 Mbps. Again, in one part of its quotation, 4D stated that there would be sustained data rates of [deleted] Mb/s, while in other parts of its quotation, 4D offered to comply with the referenced specification. In light of these inconsistent statements in its quotation, GAO believes that the agency could, and did, reasonably conclude that it was not clear from the face of 4D’s quotation that its quoted system would satisfy the RFQ’s minimum sustained bandwidth specification and, as a result, 4D’s quotation was reasonably evaluated and rejected as technically unacceptable. Moreover, 4D’s statements of compliance with the RFQ specification were not sufficient, and did not otherwise cure, the inconsistent statements in its quotation. On this record, GAO has no basis to question the agency’s actions. The protest is denied.

Protester’s contention that the agency improperly refused to consider its proposal is denied where there is no evidence that the agency received the proposal by the solicitation due date or that improper government action caused the failure of the postal service to make timely delivery, and where the record shows that the protester failed to follow the delivery instructions in the solicitation.

General Counsel P.C. Highlight:

Sector One argues that the agency should have accepted its proposal because the protester sent it by United States Postal Service (USPS) Express Mail and because the protester believes the USPS carrier attempted to deliver the proposal prior to the closing time for receipt. GAO states that it is the responsibility of each firm to deliver its proposal to the proper place at the proper time, and late delivery generally requires rejection of the submission. Where late receipt results from the failure of a vendor to reasonably fulfill its responsibility for ensuring timely delivery to the specified location, the late offer may not be considered. An offer that arrives late may only be considered if it is shown that the paramount reason for late receipt was improper government action, and where consideration of the proposal would not compromise the integrity of the competitive procurement process. Improper government action in this context is affirmative action that makes it impossible for the offeror to deliver the proposal on time.

The agency denies receiving or rejecting the Sector One proposal submission that was the subject of the alleged delivery attempt by the USPS carrier. As explained above, since USPS does not deliver mail to the building where the Office of Acquisition is located, the RFP contained a P.O. Box for mailed proposals, and allowed for hand-carried proposals provided delivery was coordinated with the contracting officer. By its own admission, the protester did not follow the instructions in the RFP for submission of its proposal in that it made no arrangements with the contracting officer for hand-carried delivery. The evidence submitted by the protester does not establish that the agency actually received the protester’s submission or that there was an attempt to deliver the proposals to the agency before the closing time established in the solicitation. As explained above, the record here, at best, only demonstrates that the USPS carrier attempted to deliver the protester’s submission to some DOS location and does not specifically demonstrate whether anyone at DOS refused to accept delivery. The record shows that the paramount reason for the nonreceipt of the protester’s submission is the protester’s failure to follow the solicitation instructions to either mail its proposal to the designated P.O. Box number or make the proper arrangements for hand-carried delivery. In short, there is nothing in the record showing that any affirmative government action deprived the protester of the ability to make a proper delivery of its proposal. GAO denies the protest.

Protest against solicitation requirement that telecommunications equipment be certified by the Joint Interoperability Test Command at the time of submission of quotations is sustained where the record does not establish that the requirement for such certification at the time of quotation submission is necessary to meet the agency’s needs.

General Counsel P.C. Highlight:

Specifically, SMARTnet objects to the requirement that the equipment be Joint Interoperability Test Command (JITC) certified and that vendor’s satisfy this requirement at the time of quotation submission. GAO states that with respect to the merits of SMARTnet’s challenge that requiring JITC certification at the time of quotation submission is unduly restrictive of competition, procuring agencies are required to specify their needs in a manner designed to permit full and open competition, and may include restrictive requirements only to the extent they are necessary to satisfy the agencies’ legitimate needs (or as otherwise authorized by law). Where a protester challenges a specification as unduly restrictive, the agency must establish that the requirement is reasonably necessary to meet its needs; GAO will examine the adequacy of the agency’s position to ensure that it is rational and can withstand logical scrutiny.

Here, SMARTnet contends that the agency does not need to have proof of certification before the time of installation, and that requiring JITC certification at the time of quotation submission essentially restricts the procurement to those firms that had this certification at the time the solicitation was issued. This is so, SMARTnet argues, because the JITC-certification process is only performed at two sites in the United States and is time-consuming. In this regard, SMARTnet states that its equipment is currently in the process of achieving final JITC certification which is being sponsored by the Department of the Army and is scheduled to be achieved later this spring in time for the apparent equipment installation.

GAO does not find that the Army’s concerns here, which all relate to the agency’s need to have JITC-certified equipment at the time of equipment installation, support the solicitation’s requirement for JITC certification at the time of quotation submission. An agency’s otherwise legitimate requirements regarding an offeror’s demonstrated ability to meet contract requirements may not be required prior to when such qualifications become relevant. The Army has simply not explained why the apparent purpose behind the certification requirement–to ensure that a system be certified prior to the time it must be fielded–requires that evidence of certification be provided as early in the process as the time at which quotations are submitted. In short, the Army has not shown its requirement that vendors’ proposed equipment be JITC certified at the time of submission of quotations is reasonable. The protest is sustained.

Protest that agency improperly failed to consider past performance of an affiliated subsidiary company is denied where the record shows that, even if considered, the past performance information offered was incomplete, and the agency’s past performance rating of neutral was therefore reasonable.

General Counsel P.C. Highlight:

Herley asserts that the Navy improperly failed to consider the past performance of Herley subsidiary Electronic Warfare Simulation Technology (EWST), submitted in support of MSI’s proposal. The protester challenges its past performance rating of neutral, asserting that, based on the supplemental past performance information regarding EWST that MSI submitted after the first round of discussions, the only reasonable past performance rating was at least favorable. GAO states that in reviewing an agency’s evaluation of past performance, GAO examines the record to determine whether the evaluation was reasonable and in accordance with the stated evaluation scheme and applicable procurement statutes and regulations. Here, consistent with Federal Acquisition Regulation sect. 15.305(a)(2)(iv), the RFP stated that [o]fferors who do not have same or similar past performance information reasonably available to the Contracting Officer will not be rated either favorable or unfavorable.

The RFP required offerors to submit past performance data that addressed all three subfactors and indicated that the agency would not be responsible for seeking out missing information. The record shows, however, that the information regarding EWST that MSI furnished to the agency after discussions was incomplete, addressing only one of the three past performance subfactors–previous experience in developing and delivering similar systems, but not reliability and timeliness of delivery. In light of the lack of information to establish the offeror’s past performance history under the two subfactors, the agency’s decision to assign MSI a past performance rating of neutral was reasonable and consistent with the RFP, even taking into account the information regarding EWST.

The protester argues that the lack of information regarding EWST’s past performance under two of the three subfactors is immaterial, because the other five past performance references MSI provided in its initial proposal did in fact address subfactors two and three. However, MSI’s five original references themselves were incomplete in the sense that they addressed only two of the five MSS subsystems; MSI’s omission of the requested past performance information relating to the other three MSS subsystems was the subject of the agency’s discussion question to MSI, asking it to address its past performance as it relates to the other three subsystems. The RFP, in requesting past performance information the way that it did, that is, by setting out the three subfactors relevant to the past performance evaluation, asked offerors to describe not only their experience with particular system components, but also, specifically, the reliability and timeliness of delivery of those components. In discussions, the protester was explicitly advised that the firm had not addressed its past performance for three of the five subsystems. Simply, the protester failed to furnish any information with regard to reliability and timeliness of delivery for those subsystems identified during discussions.

The RFP called for, but MSI did not provide, information on the reliability and timeliness of delivery of the equipment that was the subject of the supplemental past performance information offered in response to the concern raised during discussions. Because MSI failed to provide the information necessary to assess the past performance under these three contracts, GAO finds no basis on which to question the reasonableness of the protester’s past performance rating of neutral. The protest is denied.

Procuring agency had a reasonable basis to cancel request for proposals for the design and construction of a Rescue Swimmer Training Facility where the solicitation no longer accurately reflects the agency’s requirements and substantial changes to the scope of the project are necessary that may result in increased competition and a decrease in overall costs.

General Counsel P.C. Highlight:

Blue Rock contends that the cancellation was improper and violated FAR sect. 14.404.1(a)(3). It also argues that the cancellation was discriminatory towards HUBZone small business concerns and the HUBZone small business program because, in Blue Rock’s view, the expanded project will no longer be appropriate for a HUBZone small business set-aside. GAO states that as explained in the agency’s response to the agency-level protest, an agency, in a negotiated procurement, has broad authority to decide whether to cancel a solicitation, and needs only a reasonable basis to do so. A reasonable basis for cancellation exists when a solicitation does not accurately reflect the agency’s requirements, particularly where cancellation of the solicitation and the issuance of a revised solicitation would present the potential for increased competition, efficiencies or cost savings. If a reasonable basis exists to cancel a solicitation, an agency may cancel the solicitation regardless of when the information first surfaces or should have been known, even if the solicitation is not canceled until after proposals have been submitted and evaluated.

In its report in answer to this protest, the agency advises that it cancelled this solicitation because the current RFP no longer reflects its requirements, and because a substantially revised RFP is being developed, which is expected to result in greater competition and in lower overall cost. The agency reports that the pool construction project was originally planned to include both the Rescue Swimmer Training Facility and the Dunker Facility, but the agency decided to delay construction of the Dunker Facility because of a lack of funding. The agency explains that these plans have changed because Congress has now made funds available for both projects. Thus, the agency explains that it will be more efficient to build the entire complex as one project within one building, rather than adding the second feature later. In this regard, the agency states that the efficiencies of combining the two projects include, among other things: single site mobilization and demobilization, better coordinated building design, better coordinated construction, reinstatement of certain of the deleted original scope requirements for the swimmer training facility, and a reduction in the overall construction time.

GAO finds that it has no basis to question the agency’s determination that having one facility to house its water training requirements results in a more efficient training operation. The increased scope of work associated with combining these training requirements in one facility means that the current RFP does not reflect the agency’s requirements. For these reasons, GAO finds that the agency reasonably decided to cancel this RFP. The protest is denied.

Protest that agency misevaluated the protester’s proposal, and improperly conducted discussions with one awardee, is denied where the record demonstrates that the agency’s evaluation was reasonable, and that the agency properly limited its communications with one awardee to a permissible clarification.

General Counsel P.C. Highlight:

Kuhana-Spectrum argues that its proposal was misevaluated, and that the Navy conducted discussions with one of the awardees, and allowed that firm to revise its proposal, but never provided a similar opportunity to Kuhana-Spectrum.

With respect to the past performance evaluation, Kuhana-Spectrum argues that a rating of moderate risk is unreasonable in the context of Spectrum’s performance because that rating implies that successful and unsuccessful performance are both equally likely, which the firm disputes. GAO states that determining the relative merits of an offeror’s past performance information is primarily a matter within the contracting agency’s discretion; GAO will examine an agency’s evaluation only to ensure that it was reasonable and consistent with the solicitation’s evaluation criteria and procurement statutes and regulations. The record here reflects a conscientious effort by the Navy to contact references and compile relevant past performance information for Kuhana-Spectrum’s joint venturers. While the record does reflect significant positive past performance by Spectrum, the Navy evaluators also had a reasonable basis for their concerns about adverse past performance information concerning Spectrum. In GAO’s view, the Navy properly considered both the significant positive past performance information and the problems that had occurred on several contracts, including with NMLC itself. In light of the discretion afforded to agencies in the evaluation of past performance, GAO concludes that the record here supports the agency’s rating of moderate risk under the past performance factor.

Under the management plan factor, Kuhana-Spectrum argues that the Navy unfairly downgraded the firm for occasionally referring to Spectrum as a subcontractor, and for identifying only one key person by name. GAO states that the evaluation of proposals is primarily a matter within the contracting agency’s discretion which it will not question unless it finds the evaluation to be unreasonable or inconsistent with the RFP’s evaluation factors. The protester’s disagreement with the agency’s conclusions does not render the evaluation unreasonable. GAO finds that Kuhana-Spectrum was not downgraded simply because its proposal used the term subcontractor erroneously, or because it failed to list any particular number of key personnel. Rather, the record here shows that the proposal’s description of Spectrum as a subcontractor, taken together with the proposal’s identification of only one key person by name, led the Navy to be concerned that the proposal did not set forth an adequate management plan to ensure successful performance of the contract requirements. In GAO’s view, the Navy’s assessment of moderate risk under the management plan factor was reasonable on the basis of the record here.

In a supplemental protest, filed timely after Kuhana-Spectrum received additional documents with the agency report, the firm argues that the Navy conducted discussions with one awardee to allow it to correct omissions in its proposal. Kuhana-Spectrum argues that once the Navy communicated with the awardee (and allowed it to remedy a problem with its proposal), the Navy was required to hold discussions with Kuhana-Spectrum also, to allow it to improve its proposal.

First, GAO finds that the Navy reasonably concluded that the awardee’s proposal constructively acknowledged both of the material amendments to the RFP. As a general rule, an offeror’s failure to acknowledge a material amendment renders the proposal unacceptable, and such proposals may not form the basis for award. However, an amendment may be constructively acknowledged where the proposal includes the material items appearing only in the amendment. Second, GAO agrees with the Navy that it was proper to allow the awardee to correct the missing affirmation of its ORCA entries through a clarification. Offerors may be given the opportunity to clarify certain aspects of proposals without holding discussions. Specifically, an agency may allow an offeror to correct missing representations and certifications through clarifications, and does not hold discussions by doing so. Accordingly, the Navy did not hold discussions with the awardee, and was not required to hold discussions with Kuhana-Spectrum. In conclusion, GAO’s review of the record supports the reasonableness of the evaluation and the Navy’s subsequent selection decisions. The protest is denied.

Protest challenging agency’s evaluation of protester’s past performance and technical proposal is denied where record shows that the evaluation was reasonable.

General Counsel P.C. Highlight:

IMC first challenges the evaluation of its past performance. In this regard, the RFP required offerors to submit information regarding relevant contracts and subcontracts performed within the four year period prior to issuance of the solicitation. IMC listed nine contracts and provided resumes for several key personnel. One listed contract was not considered in the evaluation because it was performed prior to the relevant four year period; two contracts for grounds maintenance at military bases in the U.S. were considered moderately relevant; and the remaining six contracts were deemed only slightly relevant on the basis that “the scope of work described was either unquantified or small in scope” based on the dollar value of the contracts. In this regard, the agency noted that, while the contract under the RFP is valued at approximately $25 million annually, the average annual value of all of IMC’s listed contracts was only $3.9 million. This led the PPET to conclude that there was no evidence in IMC’s proposal that IMC had performed work of the scale and level of integration of the requirement here. In addition, the PPET concluded that the key personnel resumes submitted by IMC did not “reflect a strong direct connection to the scale of work required by the GSMP,” since they either did not reflect experience with work on the same scale as the GSMP or were unclear with regard to the employee’s role in performance. Accordingly, IMC’s prior contracts were rated only slightly relevant overall. With regard to customer satisfaction, however, IMC’s performance was rated outstanding. Consistent with the scheme established in the RFP for the rating of performance risk, IMC’s slightly relevant and outstanding performance ratings resulted in an overall moderate performance risk rating.

The evaluation of IMC’s past performance was reasonable. A review of IMC’s past performance submission confirms the agency’s finding that most of IMC’s submitted references were for contracts that were significantly smaller in size and scope. For example, two of IMC’s submitted contracts (for Ft. Polk North and Whiteman Air Force Base) had an average annual value of approximately $126,000 or less, that is, significantly less than the $25 million estimated annual value of the GSMP work. Indeed, as the agency points out, the total annual average value for all 9 contracts submitted by IMC was only $3.9 million, less than 16% of the estimated annual value of the GSMP requirement. As for the protester’s assertion that its submitted contracts were “geographically located throughout the United States encompassing a larger area logistically,” GAO finds nothing unreasonable in the agency’s conclusion that experience with geographically dispersed, but relatively small contracts is not equivalent to experience with contracts of similar scope, size and complexity to the requirement here.

IMC next challenges the evaluation of its technical proposal. Technical proposals were evaluated under two subfactors–management and technical–encompassed by the technical factor. Under the management subfactor, offerors were required to describe their management approach with regard to a phase-in schedule, staffing plan and procedures, subcontractor management, communication, and quality control plan. Under the technical subfactor, offerors were to describe their technical approach, provide a hazardous material and waste management plan, and provide an asbestos management plan. The technical evaluation team (TET) concluded that IMC’s proposal “contained major errors, omissions, and deficiencies,” and that IMC “did not have a clear understanding of the Government’s requirements.” Specifically, the evaluators found four broad deficiencies in IMC’s proposal: its staffing was very low, particularly for grounds maintenance and routine maintenance, and was inadequate to meet oversight requirements; its asbestos plan did not adequately address air sampling; its phase-in schedule did not meet the solicitation requirement for a 30-day phase-in period and did not address the required coordination with local agencies; and its subcontracting plan did not take into consideration all areas where subcontract work would be required. Consequently, the TET rated IMC’s technical proposal unsatisfactory and high risk.

As noted above, the agency determined that IMC’s technical proposal included inadequate proposed staffing. While IMC believes its staffing should have been deemed adequate, its arguments fail to establish that the agency’s concerns were unreasonable. For example, notwithstanding IMC’s proposed cross-utilization approach, neither that approach nor the proposal of specifically allocated grounds maintenance team members, on its face, addressed the relatively small number of personnel proposed to perform this work. We note, in this regard, that IMC’s proposed staffing levels were significantly lower than those proposed by the awardee–overall, while SKE proposed a total of 32 FTEs for grounds maintenance, IMC proposed only 6.61 FTEs for the same requirement. SKE Tech. As the agency points out, IMC’s reliance on cross-utilization of personnel is a shortcoming under these circumstances, since cross-utilization presupposes that adequate staffing was proposed for routine and preventive maintenance, such that personnel would be available when grounds maintenance requirements arise. The agency found that this was not the case, and IMC has not shown otherwise.

The TET found that IMC’s quality control approach did not provide for sufficient quality control staffing to ensure adequate oversight. In this regard, the agency noted that IMC had proposed to use middle managers and workers in a quality control role, which the agency determined would not provide appropriate oversight, since the middle managers would in effect be evaluating themselves. IMC challenges the agency’s concern, noting that its proposal provided for a “quality control manager” who will instruct supervisors and managers to ensure that they exceed accepted standards of performance, and asserting that its proposal does not provide for inspections by workers below the Hausmeister-level. As noted by the agency, however, IMC’s proposal specifically abjured “separating Quality Control personnel and production personnel” and instead proposed to “empower all of the production employees as quality control staff.” In these circumstances, GAO finds that the agency could reasonably conclude that IMC’s proposal provided for “forcing the QC function down” such that managers would be responsible for evaluating their own performance, which the agency reasonably viewed as a weakness.

The TET found that IMC’s asbestos management plan failed to address air sampling in a way that demonstrated an understanding of procedures mandated under the Asbestos Hazard Emergency Response Act of 1986 (AHERA), 15 U.S.C. sections 2651 etseq. (2006). IMC generally asserts that it provided an adequate asbestos monitoring plan. However, GAO finds that the record supports the agency’s evaluation. In this regard, the RFP required that offerors address compliance with AHERA and air sampling requirements in their asbestos management plan. IMC’s asbestos management plan was found to address air sampling in only a perfunctory way, merely stating, without elaboration, that IMC would “take air-monitoring readings in addition to those furnished by any asbestos contractor used by IMC, as a final reading to ensure the clean air quality in any asbestos removal area.” The agency noted that, among other omissions, IMC’s proposal did not address the difficulty of following required air sampling protocols in Germany; in that country, there is no legal requirement for Transmission Electron Microscopy testing and, therefore, there are few, if any, laboratories in Germany to perform the necessary tests, resulting in the need to send most samples to the U.S., with appropriate accountability. Given IMC’s failure to address this issue, GAO thinks the agency could reasonably find IMC’s asbestos management plan to be inadequate. The protest is denied.

Protest of the exclusion of the protester’s proposal from the competitive range is denied where an agency reasonably found that the protester’s proposal did not have a reasonable possibility of being selected for award.

General Counsel PC Highlight:

Sterling Medical Associates, Inc. protested the exclusion of its proposal from the competitive range under an RFP for healthcare services for Community-Based Outpatient Clinics (CBOCs) in various locations in Florida. Award was to be made on a best value basis, considering experience and staffing, coordination and continuity of care, past performance, subcontracting plan, and price. The RFP instructed offerors to provide a monthly capitation rate, equaling the unit cost per veteran inclusive of all services. For each CLIN, the RFP identified an estimated quantity of visits; total CLIN price would be determined by multiplying offerors’ monthly capitation rate by estimated quantity and by 12 months. Sterling was eliminated from the competitive range because the CO concluded that its proposal had no reasonable possibility of receiving award, given its significantly higher price as compared to the IGE.

The GAO first disagreed with Sterling’s belief that the agency’s evaluation of proposals was inadequately documented, pointing out that the evaluators’ judgment as to the merits, along with the strengths and weaknesses under the evaluation factors and subfactors, was well-documented for each proposal. The GAO also found reasonable the agency’s marginal evaluation of Sterling’s past performance, based on Sterling’s failure to provide three past performance surveys as required by the RFP. The GAO found no merit to the argument that the agency had converted the procurement to a lowest-priced, technically-acceptable award, finding reasonable the agency’s conclusion that Sterling’s price was substantially higher than other offerors and had no reasonably possibility of receiving award.

The establishment of a competitive range is a matter of agency discretion, and the GAO will not question the elimination of proposals from the competitive range so long as the evaluation of those proposals was reasonable. Eliminated offerors should always request a preaward debriefing so as to understand the reasoning behind their elimination from the procurement. If an offeror believes their elimination was unreasonable based on an evaluation which did not comply with the terms of the solicitation, a preaward protest may lead to corrective action after which their proposal will be considered for award. However, protestors must always remember that corrective action will not necessarily lead to award. It may merely give the protestor another chance to be considered in the tradeoff decision.

Agency reasonably concluded that protester’s responses to agency’s discussions questions introduced risk regarding the level of resources that protester was committing to perform the fixed-price portion of the solicitation requirements.

Agency reasonably evaluated protester’s past performance as very good, rather than excellent, where protester’s references rated the quality of protester’s prior performance between very good and excellent, and the record indicates that protester’s prior contracts were more relevant to the less significant of the solicitation’s two basic requirements.

General Counsel PC Highlight:

NikSoft Systems Corporation protested the award to Delmock Technologies, Inc. (DTI) of a contract to perform middleware IT services for the IRS’s Middleware Support Services Section. The RFP, issued as an 8(a) set-aside, contemplated award on a best value basis, considering management solution, quality assurance plan (QASP), past performance, past experience, and price evaluation factors. The agency determined that the proposals in the competitive range adequately addressed staffing for the software development portion of the RFP, but asked offerors to detail the number of personnel, key personnel, labor categories, and experience level proposed to support the Middleware O&M portion of the RFP. NikSoft responded that its initially proposed team was for O&M support, but removed its designation of SME for several of its key personnel.

NikSoft’s response gave the agency additional concerns regarding the breadth of expertise it was committing to the O&M requirements, and so the agency gave NikSoft another opportunity to address its proposed O&M staffing. NikSoft maintained generally that it understood the solicitation’s O&M requirements, stating that it added support staff for the service desk as well as software developers. It did not discuss its reduction in SMEs in the earlier response, nor did it address the agency’s concerns that it had committed a low number of SMEs to the O&M portion of the contract. Although NikSoft offered a lower price, the agency selected DTI based upon the risks associated with NikSoft’s proposal increasing the potential for disruption of schedule and increase in cost or degradation of performance.

The GAO disagreed with NikSoft that the agency’s evaluation of its proposed approach to performing the O&M requirements was flawed, finding reasonable the agency’s conclusion that NikSoft’s proposal did not demonstrate sufficient SMEs to support the O&M requirements. The GAO then found without merit NikSoft’s objections to its past performance evaluation, pointing out that, while NikSoft may have disagreed with the agency’s conclusions, it had failed to meaningfully challenge the past performance questionnaires on which the evaluation was based.

Offerors bear the burden of submitting a well-written proposal that complies in all material aspects with the terms of the solicitation. An agency is not obligated to search through a proposal to piece together a determination that the proposal adequately addresses certain tasks under the requirement. Where the RFP provides detailed instructions as to proposal preparation, and gives clear criteria against which proposals will be evaluated, offerors should strive to present a proposal that clearly lays out how their approach will satisfy each of those criteria.

In light of actions by the Department of Veterans Affairs (VA) and a recent decision by the U.S. Court of Federal Claims, the Government Accountability Office will no longer hear protests arguing solely that the Veterans Benefits, Health Care, and Information Technology Act of 2006, 38 U.S.C. §§ 8127-28 (2006), requires the VA to consider setting aside a procurement for service-disabled veteran-owned small businesses, or veteran-owned small businesses, before procuring its requirements under the Federal Supply Schedule.

General Counsel PC Highlight:

Kingdomware Technologies requested that the GAO reconsider its decision dismissing Kingdomware’s protest of the award of a task order (and exercise of subsequent option year) to LiveProcess using FSS procedures. Kingdomware argued that the Veterans Benefits, Health Care, and Information Technology Act of 2006 required that the agency consider setting aside the procurement for SDVOSBs. The agency had sole-sourced the task order, and did not post the task order or option exercise on FedBizOpps. Upon learning of the awards, Kingdomware protested. The protest was dismissed, as the GAO concluded that, given the passage of time of more than a year since the initial award, no useful purpose would be served by consideration of the issue.

The GAO dismissed the request for reconsideration of its earlier dismissal, stating that it will no longer hear protests based only on the argument that the VA must consider setting aside procurements for SDVOSBs (or VOSBs) before conducting an unrestricted procurement under the FSS. Given the recent US Court of Federal Claims’ decision that the VA’s interpretation of the 2006 VA Act as allowing the agency to place orders on the FSS without first considering set-asides, and the agency’s advisement to the GAO that it does not intend to follow the GAO’s recommendations stating otherwise, the GAO concluded that protestors pursuing these arguments will not be able to obtain meaningful relief.

The recent decision by the Court of Federal Claims effectively laid to rest the longstanding battle between the VA and the GAO regarding the applicability of the “Vets First” contracting priority under the 2006 VA Act. What was viewed by many as a contracting preference applicable to all VA procurements has been reduced to an optional tool to support the VA’s efforts to reach minimum goals for SDVOSB and VOSB contracts. While the GAO agreed with the veteran community that the VA should be prioritizing contracting with veterans, the VA continuously refused to follow the GAO’s recommendations. SDVOSBs and VOSBs should still seek CVE verification for those opportunities the VA does opt to set aside, but should obtain relevant FSS contracts so as to maximize their opportunities to contract with the VA.

In a procurement covered by the Trade Agreements Act (TAA), protest of an award to a vendor whose quotation identified products that were not TAA-compliant is sustained, where the agency failed to follow required evaluation procedures for TAA procurements, improperly failed to ascertain whether the products identified by the protester were TAA-compliant, and did not conduct meaningful discussions with the protester even though the agency regarded the protester’s quoted price as unreasonably high.

General Counsel P.C. Highlight:

Tiger protests that the agency unlawfully awarded the contract to a non-TAA- compliant vendor (Vantage) and improperly rejected Tiger’s quotation. GAO states that in a procurement covered by the TAA, such as the one here, an agency is prohibited from procuring, or even considering, non-TAA-compliant products unless the head of the contracting activity makes an [i]ndividual determination of non-availability, that is, a determination that no TAA-compliant goods are available in sufficient and reasonably available quantities of a satisfactory quality. In this regard, an agency must [c]onsider only offers of U.S.-made or designated country end products, unless no offers of such end products were received. Only if no offer for a TAA-compliant product is received may an agency procure a non-TAA-compliant product, and only after the head of the contracting activity makes an individual non-availability determination.

Tiger argues that the agency violated the TAA and its implementing regulations when it considered price before determining TAA compliance, evaluated Vantage’s and [REDACTED] quotations even though their vehicles were not TAA-compliant, and awarded the contract to Vantage without obtaining the required non-availability determination from the head of the contracting activity. Tiger also complains that the agency failed to affirmatively determine that Tiger’s vehicles complied with the TAA.

As an initial matter, GAO notes that it is not clear from the record that Tiger’s vehicles are, in fact, TAA-compliant. Consistent with this record, the contracting officer’s determination was only that Tiger’s vehicles may be TAA-compliant. Nonetheless, as noted above, the FAR requires that the agency consider only TAA-compliant products, which necessarily requires that the agency first determine whether Tiger’s vehicles were TAA-compliant in order to ascertain whether any TAA-compliant products were available. If the agency had determined here that Tiger’s vehicles were TAA-compliant, then the remaining vendors’ quotations for non-TAA-compliant vehicles should have been eliminated from consideration and the agency should have evaluated only Tiger’s quotation against the RFQ’s evaluation criteria, including evaluating Tiger’s price for reasonableness as further discussed below. If, however, the agency had determined that Tiger’s vehicles, like the other vendors’ vehicles, were not TAA-compliant, the head of the contracting activity would have been required to issue a non-availability determination, if he or she found it was warranted, before the agency could have selected a quotation for non-TAA-compliant vehicles for award. None of these events occurred here. Instead, in violation of FAR sect. 25.502, the agency failed to determine whether Tiger’s vehicles complied with the TAA and made award based on a quotation for non-TAA-compliant vehicles without first obtaining a non-availability determination from the head of the contracting activity. GAO sustains the protest on these bases.

The agency asserts that Tiger was not prejudiced by any potential error in the evaluation, including TAA compliance, because it was not eligible for award due to its unreasonable price. It is a fundamental requirement that a government agency cannot award a contract at more than a fair and reasonable price, and there is nothing in the TAA or its implementing regulations that indicates that TAA-compliant products can be acquired for an amount greater than a fair and reasonable price. In this regard, FAR sect. 15.402(a) states that a contracting officer must purchase supplies and services at a fair and reasonable price. GAO states that if the agency, in accordance with FAR sect. 25.502, determines that Tiger’s vehicles are TAA-compliant, and then the agency must evaluate Tiger’s quotation, including whether Tiger’s quoted price is fair and reasonable. GAO recognizes that the agency determined that Tiger’s price was exorbitantly unreasonable and found Tiger ineligible for award on this basis. However, the record also confirms that the agency failed to raise this issue during discussions, even though it held numerous rounds of discussions with the vendors and requested revised quotations inviting vendors to reduce their price. Although the agency asserts that discussions were not intended and were not held, GAO finds that the numerous questions and clarifications issued to vendors followed by the agency’s request for best and final offers, which included revisions to vendor’s prices, constitutes discussions as contemplated by the FAR.

Although the solicitation here did not require the agency to hold discussions with vendors, once an agency chooses to do so, as occurred here, the discussions are required to be meaningful; that is, the agency is required to raise with a vendor significant weaknesses and deficiencies identified in the vendor’s quotation. Discussions cannot be meaningful if a vendor is not advised of the significant weaknesses or deficiencies that must be addressed in order for its quotation to be in line for award. Tiger’s quoted price was viewed by the agency as a deficiency, as Tiger’s price was the sole basis for the agency’s finding that the quotation was ineligible for award. In holding discussions with Tiger, but not raising with the firm the concern that Tiger’s price was unreasonable, the agency did not provide Tiger with meaningful discussions. GAO finds a reasonable possibility that Tiger was prejudiced by the agency’s failure to hold discussions concerning the reasonableness of the firm’s price. Had the agency raised its concern with Tiger, then Tiger would have had the opportunity to explain why its price was fair and reasonable or to reduce it, such that the agency may have ultimately found the price to be fair and reasonable and, thus, Tiger’s quotation would have been in line for award. Coupled with the agency’s failure to properly evaluate TAA eligibility, GAO finds that the agency’s failure to hold meaningful discussions prejudiced the protester, and GAO sustains the protest on these bases.

Price evaluation, which included all option year license prices, was reasonable where vendor did not indicate any price reduction in option years for initial, “perpetual” licenses quoted in base year, and solicitation, as clarified by agency, provided that option year license pricing represented the cost of initial licenses for subsequent years.

General Counsel P.C. Highlight:

Privasoft challenges the evaluation of its quoted price. GAO states that it will review a price evaluation to determine whether it was reasonable and consistent with the solicitation’s evaluation criteria. Privasoft specifically asserts that, because its quotation identified its licenses as “perpetual,” and notwithstanding that it priced the 25 licenses for each option year as directed by the RFQ, the agency’s price evaluation improperly included the price of all 25 licenses in each option year. Had the agency used the reduced quantities in its evaluation, Privasoft’s total price would be lower than AINS’s.

This assertion is without merit. The agency made clear through its response to question 25, that it expected vendors to quote a price for “the cost of the initial 25 licenses for subsequent years” and Privasoft did this. While Privasoft’s quotation identified its licenses as “perpetual,” it did not indicate that this designation would result in any reduction in price. To the contrary, its price for each license in the option years was equal to or greater than the price quoted for the base year. To the extent Privasoft intended to quote a reduced price for licenses in the option years, it was required to clearly indicate this in its quotation, not leave it to the agency to deduce from its reference to perpetual licenses. Since an agency’s evaluation is dependent upon the information furnished in a quotation, it is the vendor’s burden to submit an adequately written quotation for the agency to evaluate; a protester’s failure to fulfill its obligation in this regard does not render the evaluation unreasonable. Given the absence of any indication in Privasoft’s quotation of reduced pricing for the option years, the agency reasonably considered Privasoft’s option prices and quantities–as quoted–in its evaluation. The protest is denied.

Agency’s decision to establish a revised competitive range and conduct discussions with small business concerns whose proposals were deemed the most highly rated rather than withdraw the set-aside and reissue the solicitation on an unrestricted basis was reasonable under the circumstances; the exclusion of technically marginal proposals from the competitive range, while permissible, is not required.

General Counsel P.C. Highlight:

Cambridge, the apparent awardee which was later determined ineligible for award under the applicable small business size standard, challenges the agency’s decision to establish a revised competitive range rather than cancel and reissue the solicitation on an unrestricted basis. GAO states that the decision to establish a competitive range and the determination whether a proposal should be included therein is principally a matter within the sound judgment of the procuring agency. The significance of the weaknesses and/or deficiencies in an offeror’s proposal, within the context of a given competition, is a matter for which the procuring agency is itself, the most qualified entity to render judgment. GAO will review that judgment only to ensure it was reasonable and in accord with the solicitation provisions; a protester’s mere disagreement with an agency’s judgment does not establish that the judgment was unreasonable.

GAO finds Cambridge’s argument that the agency improperly established a revised competitive range comprised of allegedly technically unacceptable proposals without merit. Under the regulatory scheme applicable here, the contracting officer was required to establish a competitive range comprised of all of the most highly rated proposals based on the “ratings of each proposal against all evaluation criteria.” Of the remaining small business offerors, the initial proposals submitted by Chugach and Sim-G were determined to be the most highly rated based on the overall technical rating of marginal. That is, the agency evaluators concluded that any errors or deficiencies in the proposals could be corrected through discussions without a major rewrite or major revision of proposals.

Moreover, contrary to the protester’s view, the solicitation did not require the inclusion of only technically acceptable proposals in the competitive range. Rather, as noted above, section M of the solicitation simply mandated that to be considered for award, proposals had to receive at least an acceptable rating under the non-price evaluation factors. In any event, as the agency and Chugach both argue, based on the initial evaluation of proposals the two offerors included in the revised competitive range were determined capable of performing the required effort, and Cambridge has not shown otherwise. Since the record indicates that neither Chugach’s or Sim-G’s initial proposal were rated unsatisfactory under any non-price factor, GAO finds the contracting officer reasonably concluded that the agency could receive offers from these two small businesses at fair market prices if discussions were conducted with both concerns. In short, GAO is not persuaded by, and nothing in the record supports, the protester’s contention that the agency was required to withdraw the set-aside and reissue the solicitation on an unrestricted basis. The protest is denied.

Where agency responded to earlier protest, in which the agency tender official (ATO) challenged the adequacy of the solicitation’s workload information, by stating that it would provide additional workload data, and earlier protest was withdrawn, ATO was required to re-file a protest challenging the ongoing alleged inadequacy of information prior to submitting agency tender.

The solicitation contained no ambiguity regarding inclusion of vehicle fuel costs where it specifically stated that “fuel is considered Government-furnished,” and agency confirmed this provision in responding to ATO question regarding the cost of fuel.

General Counsel P.C. Highlight:

The ATO, after an initial protest, again asserts that the PWS was “contradictory, confusing, and inaccurate” and that “[d]espite consistent, good-faith efforts by the . . . MEO team, the agency consistently failed to correct mistakes.” The protest maintains that, despite the agency’s actions taken in response to the ATO’s November 2007 protest, the agency “continued to fail to fully and accurately answer questions.” The ATO’s protest is based entirely on the adequacy of the agency’s responses to three ATO questions.

First, the ATO’s protest refers to Question T-0092-CE, concerning the solicitation requirements to provide support for special events. The protest asserts that “[t]he MEO attempted to meet all service requirements in support of special events in the most comprehensive manner,” but maintains that “the data provided . . . in Appendix 11B was inaccurate, ambiguous and incomplete.” The protest notes that, in response to the ATO’s question, the agency stated that it was “[u]nable to locate this workload data.” Based on this response, the ATO asserts that “even the agency was confused about the work load data.”

In November 2008, the agency submitted a report responding to the ATO’s October 2008 protest, stating that, although the agency did not have the data to respond to the ATO’s question on June 4, 2007–that is, at the time it published the response to Question T-0092-CE–the agency subsequently obtained the required information, compiled that data in appendix 11B, and posted it to the FedBizOpps website on June 20. The contracting officer further states that appendix 11B was thereafter published as an attachment to the RFP in September 2007. Finally, the contracting officer states that, following the ATO’s first protest in November 2007, the agency published a notice advising offerors that additional comprehensive data regarding the special events workload requirements was available on the Federal Technical Data Solutions (FedTeDS) Internet website.

The ATO did not re-file its protest challenging the adequacy of the solicitation information prior to submitting the agency tender in February 2008. The Bid Protest Regulations contain strict rules requiring timely submission of protests. These rules require that protests based upon alleged improprieties in a solicitation that are apparent prior to the closing time for receipt of proposal must be filed prior to that time. Thus, if the ATO believed that the additional information provided by the agency in response to the ATO’s first protest continued to be inadequate to facilitate preparation of the agency tender, the ATO was required to protest that matter before submitting it’s tender. Since it did not, to the extent its protest is based on the alleged inadequacy of solicitation information, the protest is untimely and, therefore, must be dismissed.

Next, the protest refers to Question T-16-405-CE, in which the ATO questioned the sufficiency of the workload data in appendix 16B related to the solicitation requirements to manage environmental matters. The agency responded to this question on July 30, stating the offerors should “review the final RFP upon posting for the workload information necessary to prepare a proposal.” The protest asserts that this is another example of the agency’s “fail[ure] to provide a proper answer.” In responding to the protest, the contracting officer points out that the agency published its response to Question T-16-405-CE in July 2007–more than a month before the agency published the solicitation in September 2007. The contracting officer further states that, following the agency’s July 2007 response, appendix 16B was revised and republished with the RFP, and that, following that republication, the ATO did not again question the sufficiency of the data.

The ATO did not re-file its protest challenging the adequacy of the solicitation information prior to submitting the agency tender in February 2008. Further, in its post-agency report comments, the ATO has not further addressed this matter in anyway. Accordingly, as discussed above with regard to question T-0092-CE, this protest issue is dismissed as not timely raised and, in any event, has been abandoned.

Finally, the ATO’s protest refers to Question T-02-626, and the agency response, regarding the historic data for vehicle operation and maintenance provided by the agency in RFP appendix 2FF. The ATO asserts that the agency’s response regarding fuel costs was misleading and/or ambiguous and that the MEO reasonably concluded that additional costs for vehicle fuel had to be included in the agency tender. The record does not support this assertion. Specifically, as discussed above, section H-019 of the solicitation, titled “Government Provided Fuel,” explicitly advised the offerors: “[t]he service provider is authorized to use the self-service base service station to Sheppard AFB to refuel Government furnished and service provider acquired vehicles and equipment. . . . This fuel is considered Government-furnished.” Consistent with this unambiguous solicitation provision, the agency’s response to Question T-02-626-CE confirmed the directions of that provision, stating that the historic data in appendix 2FF, which had been provided for use in preparing proposals, did not include the cost of fuel.

On this record, the ATO cannot persuasively argue that it reasonably believed the agency tender should include the cost of vehicle fuel. To the contrary, the solicitation expressly provided that such costs were not to be included in proposals because the fuel would be provided by the government, and the agency re-enforced the solicitation provision in responding to the ATO’s question. On the record here, GAO finds no merit in the ATO’s assertion that the solicitation information and/or the agency response to Question T-02-626-CE was misleading or created ambiguity with regard to the service provider’s fuel costs; the ATO’s protest to the contrary is denied. The protest is dismissed in part and denied in part.

Protest that agency misevaluated quotations in response to solicitation for computer workstations is denied where record shows that agency’s evaluation was in accordance with terms of solicitation and applicable statutes and regulations.

General Counsel P.C. Highlight:

Dell asserts that the agency did not adequately document its evaluation conclusions in its section 508 compliance review. According to the protester, the agency merely gave evaluation credit to vendors for the self-representations on their VPATS, without reviewing in detail the content of the submissions, and assigned point scores for compliance with the various standards without identifying the underlying rationale.

GAO finds that this argument is without merit. In this regard, the record shows that the agency’s evaluators engaged in a protracted review of the vendors’ VPAT submissions, during which they repeatedly sought additional information where they identified deficiencies or informational gaps in the VPATs. For example, after reviewing the initial VPATs, the evaluators summarized their conclusions, noting those areas where the vendors failed to address the informational requirements of the VPATs. The agency then sent clarification requests to both vendors requesting additional details in support of their claims regarding compliance. This process was repeated numerous times throughout the agency’s evaluation. The record also shows that the agency’s evaluation conclusions changed throughout this process in response to the information received from its requests for clarification. In short, GAO finds that, contrary to Dell’s assertions, the evaluators in fact performed a detailed evaluation of the VPATS, and the record adequately memorializes that evaluation.

Dell next asserts that the agency improperly assigned HP evaluation points for its workstation and 22-inch monitor under the software applications and operating systems criteria. According to Dell, since this acquisition does not include software, giving credit for section 508 compliant software was unreasonable. Dell maintains that, in contrast, it received no similar evaluation points because its quotation accurately characterized this standard as not applicable. Similarly, Dell maintains that the agency improperly assigned HP an extra evaluation point for quoting a 22-inch monitor that had a compliant touch screen or touch-operated controls, even though the agency is not acquiring such products. According to the protester, in both situations, the competitors should have been assigned a not applicable rating for these items.

GAO finds that the protester’s assertion is based on a premise that mischaracterizes the agency’s evaluation. The record shows that the VPATs were reviewed under numerous–and sometimes differing–regulatory categories, depending on the product in question. For example, the workstation VPATs were reviewed for compliance under 36 C.F.R. sections 1194.21, 1194.23, 1194.26, 1194.31 and 1194.41. Within each regulatory category, there were a discrete number of requirements; for example, under 36 C.F.R. sect. 1194.21, there were 12 requirements. However, there is no indication in the record that the agency assigned evaluation points under the various categories, or that it subsequently tallied points for purposes of evaluating the compliance of a given product with the section 508 standards. Rather, the record shows that the agency’s methodology was to assign a rating of supports to a component where all of the standards were rated as either fully supported or not applicable; that is, the evaluation made no distinction between a fully supported and a not applicable rating for purposes of determining compliance. The controlling consideration was whether a component received one or more ratings of partially supported for a category; in that case, the component automatically received a rating of partially supported for the category. Thus, the record shows that the agency’s ultimate evaluation conclusion would not have changed, even if the protester were correct that the agency improperly assigned HP’s workstation and 22-inch monitor supported rather than not applicable ratings for some of the requirements. It follows that there is no basis for GAO to question the evaluation in this area.

Dell asserts that the agency disparately evaluated the quotations regarding the RFQ requirement for information, documentation, and support for their products that would accommodate disabled workers. Dell claims that HP and itself met the requirement the same way–in the form of a toll-free number, available Monday through Friday during regular business hours, that would accommodate callers using telecommunications device for the deaf/teletypewriter (TDD/TTY) terminals (which are used by hearing and speech impaired individuals). Dell also asserts that both vendors offered information, documentation and support via their websites 24 hours a day. HP’s workstation, 19-inch monitor and 22-inch monitor were rated as fully supporting the standard, while Dell’s received partially supports ratings under 36 C.F.R. sect. 1194.41. Dell maintains that these disparate evaluation conclusions were unreasonable given that the two vendors quoted identical approaches.

GAO finds that this argument is without merit. While Dell may have quoted the same toll-free number approach as HP, the record shows that this aspect of the quotations was not the reason for the disparate ratings in this area. The agency evaluated the vendors’ websites under 36 C.F.R. sect. 1194.22 to determine whether they supported the section 508 standards. The vendors’ VPATs and the agency’s evaluation conclusions show that HP’s website was rated fully supports for all 16 requirements under 36 C.F.R. sect. 1194.22, whereas Dell’s was rated fully supports under only six of the requirements and partially supports under five Consistent with its evaluation methodology, the agency therefore rated HP’s website as fully supports and Dell’s as partially supports.

In rating the vendors’ other offered components, the agency assigned fully supports ratings to the HP products under 36 C.F.R. sect. 1194.41 because HP quoted TDD/TTY terminals and a website that had been determined to fully support the section 508 standards. In contrast, when rating Dell’s other components, the agency assigned partially supports ratings to Dell’s workstation and 22-inch monitor under 36 C.F.R. sect. 1194.41 because, although Dell also quoted TDD/TTY terminal support and a website, its website had been rated only partially supports.This evaluation conclusion was unobjectionable; since the Dell website did not fully support the section 508 standards, and the remaining products were dependent on that website to provide prospective users with the information, documentation and support, the agency reasonably concluded that Dell’s components warranted a partially supports rating.

Dell asserts that the agency misevaluated its workstation when it conducted its hands-on test for purposes of determining whether the workstation was compatible with the SSA accessibility standards (the JAWS and MAGic software applications). The RFQ required vendors to supply workstations that had operating system software already installed, but the agency installed the JAWS and MAGis software applications prior to conducting the hands-on testing. The agency found that the Dell workstation did not perform as well as HP’s when these applications were run. According to Dell, its and HP’s workstations employ the same [deleted], and therefore should have performed more or less identically; it thus infers that there had to be a problem with the agency’s installation of the JAWS and MAGic software applications on its workstation, or that the agency must have configured its workstation incorrectly prior to conducting the hands-on test.

This argument is without merit. First, Dell has not asserted or demonstrated that, even though its workstation and the HP workstation have certain components in common, they are configured identically, such that identical test results necessarily would be expected. HP points out, for example, that differences in other system components, firmware, or other hardware configuration questions leave open the possibility that the two workstations would perform differently. Further, there is no other evidence supporting Dell’s inference that the performance of its workstation during the hands-on test was attributable to errors on the part of the agency in installing the JAWS and MAGic software applications, or in otherwise configuring its workstation prior to the test.

In any case, the record shows that, ultimately, the agency’s observations during the hands-on test resulted in its merely concluding that there was a difference in performance between the two workstations, not that the Dell product was technically unacceptable. In this respect, the record includes an e-mail chain that began with an email from the head of the testing group to several other people in the agency. In response to that e-mail, one of the agency’s procurement officials stated: It is unclear whether the report below proposed to fail the Dell 755, but the way I interpret the comments, it is a performance issue and not a failure. Likewise, there is no indication that the agency considered the hands-on test results for Dell in either the section 508 compliance findings, or in the source selection decision itself. In the final section 508 compliance evaluation report, there is no mention of the results of Dell’s test results, and there is only a passing reference to HP’s results. These conclusions are repeated verbatim in the source selection decision. It thus does not appear that the test results were used as a discriminator in the award decision. The protest is denied.

In a procurement covered by the Trade Agreements Act (TAA), protest of an award to a vendor whose quotation identified products that were not TAA-compliant is sustained, where the agency failed to follow required evaluation procedures for TAA procurements, improperly failed to ascertain whether the products identified by the protester were TAA-compliant, and did not conduct meaningful discussions with the protester even though the agency regarded the protester’s quoted price as unreasonably high.

General Counsel P.C. Highlight:

Tiger protests that the agency unlawfully awarded the contract to a non-TAA- compliant vendor (Vantage) and improperly rejected Tiger’s quotation. GAO states that in a procurement covered by the TAA, such as the one here, an agency is prohibited from procuring, or even considering, non-TAA-compliant products unless the head of the contracting activity makes an [i]ndividual determination of non-availability, that is, a determination that no TAA-compliant goods are available in sufficient and reasonably available quantities of a satisfactory quality. In this regard, an agency must [c]onsider only offers of U.S.-made or designated country end products, unless no offers of such end products were received. Only if no offer for a TAA-compliant product is received may an agency procure a non-TAA-compliant product, and only after the head of the contracting activity makes an individual non-availability determination.

Tiger argues that the agency violated the TAA and its implementing regulations when it considered price before determining TAA compliance, evaluated Vantage’s and [REDACTED] quotations even though their vehicles were not TAA-compliant, and awarded the contract to Vantage without obtaining the required non-availability determination from the head of the contracting activity. Tiger also complains that the agency failed to affirmatively determine that Tiger’s vehicles complied with the TAA.

As an initial matter, GAO notes that it is not clear from the record that Tiger’s vehicles are, in fact, TAA-compliant. Consistent with this record, the contracting officer’s determination was only that Tiger’s vehicles may be TAA-compliant. Nonetheless, as noted above, the FAR requires that the agency consider only TAA-compliant products, which necessarily requires that the agency first determine whether Tiger’s vehicles were TAA-compliant in order to ascertain whether any TAA-compliant products were available. If the agency had determined here that Tiger’s vehicles were TAA-compliant, then the remaining vendors’ quotations for non-TAA-compliant vehicles should have been eliminated from consideration and the agency should have evaluated only Tiger’s quotation against the RFQ’s evaluation criteria, including evaluating Tiger’s price for reasonableness as further discussed below. If, however, the agency had determined that Tiger’s vehicles, like the other vendors’ vehicles, were not TAA-compliant, the head of the contracting activity would have been required to issue a non-availability determination, if he or she found it was warranted, before the agency could have selected a quotation for non-TAA-compliant vehicles for award. None of these events occurred here. Instead, in violation of FAR sect. 25.502, the agency failed to determine whether Tiger’s vehicles complied with the TAA and made award based on a quotation for non-TAA-compliant vehicles without first obtaining a non-availability determination from the head of the contracting activity. GAO sustains the protest on these bases.

The agency asserts that Tiger was not prejudiced by any potential error in the evaluation, including TAA compliance, because it was not eligible for award due to its unreasonable price. It is a fundamental requirement that a government agency cannot award a contract at more than a fair and reasonable price, and there is nothing in the TAA or its implementing regulations that indicates that TAA-compliant products can be acquired for an amount greater than a fair and reasonable price. In this regard, FAR sect. 15.402(a) states that a contracting officer must purchase supplies and services at a fair and reasonable price. GAO states that if the agency, in accordance with FAR sect. 25.502, determines that Tiger’s vehicles are TAA-compliant, and then the agency must evaluate Tiger’s quotation, including whether Tiger’s quoted price is fair and reasonable. GAO recognizes that the agency determined that Tiger’s price was exorbitantly unreasonable and found Tiger ineligible for award on this basis. However, the record also confirms that the agency failed to raise this issue during discussions, even though it held numerous rounds of discussions with the vendors and requested revised quotations inviting vendors to reduce their price. Although the agency asserts that discussions were not intended and were not held, GAO finds that the numerous questions and clarifications issued to vendors followed by the agency’s request for best and final offers, which included revisions to vendor’s prices, constitutes discussions as contemplated by the FAR.

Although the solicitation here did not require the agency to hold discussions with vendors, once an agency chooses to do so, as occurred here, the discussions are required to be meaningful; that is, the agency is required to raise with a vendor significant weaknesses and deficiencies identified in the vendor’s quotation. Discussions cannot be meaningful if a vendor is not advised of the significant weaknesses or deficiencies that must be addressed in order for its quotation to be in line for award. Tiger’s quoted price was viewed by the agency as a deficiency, as Tiger’s price was the sole basis for the agency’s finding that the quotation was ineligible for award. In holding discussions with Tiger, but not raising with the firm the concern that Tiger’s price was unreasonable, the agency did not provide Tiger with meaningful discussions. GAO finds a reasonable possibility that Tiger was prejudiced by the agency’s failure to hold discussions concerning the reasonableness of the firm’s price. Had the agency raised its concern with Tiger, then Tiger would have had the opportunity to explain why its price was fair and reasonable or to reduce it, such that the agency may have ultimately found the price to be fair and reasonable and, thus, Tiger’s quotation would have been in line for award. Coupled with the agency’s failure to properly evaluate TAA eligibility, GAO finds that the agency’s failure to hold meaningful discussions prejudiced the protester, and GAO sustains the protest on these bases.

Price evaluation, which included all option year license prices, was reasonable where vendor did not indicate any price reduction in option years for initial, “perpetual” licenses quoted in base year, and solicitation, as clarified by agency, provided that option year license pricing represented the cost of initial licenses for subsequent years.

General Counsel P.C. Highlight:

Privasoft challenges the evaluation of its quoted price. GAO states that it will review a price evaluation to determine whether it was reasonable and consistent with the solicitation’s evaluation criteria. Privasoft specifically asserts that, because its quotation identified its licenses as “perpetual,” and notwithstanding that it priced the 25 licenses for each option year as directed by the RFQ, the agency’s price evaluation improperly included the price of all 25 licenses in each option year. Had the agency used the reduced quantities in its evaluation, Privasoft’s total price would be lower than AINS’s.

This assertion is without merit. The agency made clear through its response to question 25, that it expected vendors to quote a price for “the cost of the initial 25 licenses for subsequent years” and Privasoft did this. While Privasoft’s quotation identified its licenses as “perpetual,” it did not indicate that this designation would result in any reduction in price. To the contrary, its price for each license in the option years was equal to or greater than the price quoted for the base year. To the extent Privasoft intended to quote a reduced price for licenses in the option years, it was required to clearly indicate this in its quotation, not leave it to the agency to deduce from its reference to perpetual licenses. Since an agency’s evaluation is dependent upon the information furnished in a quotation, it is the vendor’s burden to submit an adequately written quotation for the agency to evaluate; a protester’s failure to fulfill its obligation in this regard does not render the evaluation unreasonable. Given the absence of any indication in Privasoft’s quotation of reduced pricing for the option years, the agency reasonably considered Privasoft’s option prices and quantities–as quoted–in its evaluation. The protest is denied.

Agency’s decision to establish a revised competitive range and conduct discussions with small business concerns whose proposals were deemed the most highly rated rather than withdraw the set-aside and reissue the solicitation on an unrestricted basis was reasonable under the circumstances; the exclusion of technically marginal proposals from the competitive range, while permissible, is not required.

General Counsel P.C. Highlight:

Cambridge, the apparent awardee which was later determined ineligible for award under the applicable small business size standard, challenges the agency’s decision to establish a revised competitive range rather than cancel and reissue the solicitation on an unrestricted basis. GAO states that the decision to establish a competitive range and the determination whether a proposal should be included therein is principally a matter within the sound judgment of the procuring agency. The significance of the weaknesses and/or deficiencies in an offeror’s proposal, within the context of a given competition, is a matter for which the procuring agency is itself, the most qualified entity to render judgment. GAO will review that judgment only to ensure it was reasonable and in accord with the solicitation provisions; a protester’s mere disagreement with an agency’s judgment does not establish that the judgment was unreasonable.

GAO finds Cambridge’s argument that the agency improperly established a revised competitive range comprised of allegedly technically unacceptable proposals without merit. Under the regulatory scheme applicable here, the contracting officer was required to establish a competitive range comprised of all of the most highly rated proposals based on the “ratings of each proposal against all evaluation criteria.” Of the remaining small business offerors, the initial proposals submitted by Chugach and Sim-G were determined to be the most highly rated based on the overall technical rating of marginal. That is, the agency evaluators concluded that any errors or deficiencies in the proposals could be corrected through discussions without a major rewrite or major revision of proposals.

Moreover, contrary to the protester’s view, the solicitation did not require the inclusion of only technically acceptable proposals in the competitive range. Rather, as noted above, section M of the solicitation simply mandated that to be considered for award, proposals had to receive at least an acceptable rating under the non-price evaluation factors. In any event, as the agency and Chugach both argue, based on the initial evaluation of proposals the two offerors included in the revised competitive range were determined capable of performing the required effort, and Cambridge has not shown otherwise. Since the record indicates that neither Chugach’s or Sim-G’s initial proposal were rated unsatisfactory under any non-price factor, GAO finds the contracting officer reasonably concluded that the agency could receive offers from these two small businesses at fair market prices if discussions were conducted with both concerns. In short, GAO is not persuaded by, and nothing in the record supports, the protester’s contention that the agency was required to withdraw the set-aside and reissue the solicitation on an unrestricted basis. The protest is denied.

Where agency responded to earlier protest, in which the agency tender official (ATO) challenged the adequacy of the solicitation’s workload information, by stating that it would provide additional workload data, and earlier protest was withdrawn, ATO was required to re-file a protest challenging the ongoing alleged inadequacy of information prior to submitting agency tender.

The solicitation contained no ambiguity regarding inclusion of vehicle fuel costs where it specifically stated that “fuel is considered Government-furnished,” and agency confirmed this provision in responding to ATO question regarding the cost of fuel.

General Counsel P.C. Highlight:

The ATO, after an initial protest, again asserts that the PWS was “contradictory, confusing, and inaccurate” and that “[d]espite consistent, good-faith efforts by the . . . MEO team, the agency consistently failed to correct mistakes.” The protest maintains that, despite the agency’s actions taken in response to the ATO’s November 2007 protest, the agency “continued to fail to fully and accurately answer questions.” The ATO’s protest is based entirely on the adequacy of the agency’s responses to three ATO questions.

First, the ATO’s protest refers to Question T-0092-CE, concerning the solicitation requirements to provide support for special events. The protest asserts that “[t]he MEO attempted to meet all service requirements in support of special events in the most comprehensive manner,” but maintains that “the data provided . . . in Appendix 11B was inaccurate, ambiguous and incomplete.” The protest notes that, in response to the ATO’s question, the agency stated that it was “[u]nable to locate this workload data.” Based on this response, the ATO asserts that “even the agency was confused about the work load data.”

In November 2008, the agency submitted a report responding to the ATO’s October 2008 protest, stating that, although the agency did not have the data to respond to the ATO’s question on June 4, 2007–that is, at the time it published the response to Question T-0092-CE–the agency subsequently obtained the required information, compiled that data in appendix 11B, and posted it to the FedBizOpps website on June 20. The contracting officer further states that appendix 11B was thereafter published as an attachment to the RFP in September 2007. Finally, the contracting officer states that, following the ATO’s first protest in November 2007, the agency published a notice advising offerors that additional comprehensive data regarding the special events workload requirements was available on the Federal Technical Data Solutions (FedTeDS) Internet website.

The ATO did not re-file its protest challenging the adequacy of the solicitation information prior to submitting the agency tender in February 2008. The Bid Protest Regulations contain strict rules requiring timely submission of protests. These rules require that protests based upon alleged improprieties in a solicitation that are apparent prior to the closing time for receipt of proposal must be filed prior to that time. Thus, if the ATO believed that the additional information provided by the agency in response to the ATO’s first protest continued to be inadequate to facilitate preparation of the agency tender, the ATO was required to protest that matter before submitting it’s tender. Since it did not, to the extent its protest is based on the alleged inadequacy of solicitation information, the protest is untimely and, therefore, must be dismissed.

Next, the protest refers to Question T-16-405-CE, in which the ATO questioned the sufficiency of the workload data in appendix 16B related to the solicitation requirements to manage environmental matters. The agency responded to this question on July 30, stating the offerors should “review the final RFP upon posting for the workload information necessary to prepare a proposal.” The protest asserts that this is another example of the agency’s “fail[ure] to provide a proper answer.” In responding to the protest, the contracting officer points out that the agency published its response to Question T-16-405-CE in July 2007–more than a month before the agency published the solicitation in September 2007. The contracting officer further states that, following the agency’s July 2007 response, appendix 16B was revised and republished with the RFP, and that, following that republication, the ATO did not again question the sufficiency of the data.

The ATO did not re-file its protest challenging the adequacy of the solicitation information prior to submitting the agency tender in February 2008. Further, in its post-agency report comments, the ATO has not further addressed this matter in anyway. Accordingly, as discussed above with regard to question T-0092-CE, this protest issue is dismissed as not timely raised and, in any event, has been abandoned.

Finally, the ATO’s protest refers to Question T-02-626, and the agency response, regarding the historic data for vehicle operation and maintenance provided by the agency in RFP appendix 2FF. The ATO asserts that the agency’s response regarding fuel costs was misleading and/or ambiguous and that the MEO reasonably concluded that additional costs for vehicle fuel had to be included in the agency tender. The record does not support this assertion. Specifically, as discussed above, section H-019 of the solicitation, titled “Government Provided Fuel,” explicitly advised the offerors: “[t]he service provider is authorized to use the self-service base service station to Sheppard AFB to refuel Government furnished and service provider acquired vehicles and equipment. . . . This fuel is considered Government-furnished.” Consistent with this unambiguous solicitation provision, the agency’s response to Question T-02-626-CE confirmed the directions of that provision, stating that the historic data in appendix 2FF, which had been provided for use in preparing proposals, did not include the cost of fuel.

On this record, the ATO cannot persuasively argue that it reasonably believed the agency tender should include the cost of vehicle fuel. To the contrary, the solicitation expressly provided that such costs were not to be included in proposals because the fuel would be provided by the government, and the agency re-enforced the solicitation provision in responding to the ATO’s question. On the record here, GAO finds no merit in the ATO’s assertion that the solicitation information and/or the agency response to Question T-02-626-CE was misleading or created ambiguity with regard to the service provider’s fuel costs; the ATO’s protest to the contrary is denied. The protest is dismissed in part and denied in part.

Protest that agency misevaluated quotations in response to solicitation for computer workstations is denied where record shows that agency’s evaluation was in accordance with terms of solicitation and applicable statutes and regulations.

General Counsel P.C. Highlight:

Dell asserts that the agency did not adequately document its evaluation conclusions in its section 508 compliance review. According to the protester, the agency merely gave evaluation credit to vendors for the self-representations on their VPATS, without reviewing in detail the content of the submissions, and assigned point scores for compliance with the various standards without identifying the underlying rationale.

GAO finds that this argument is without merit. In this regard, the record shows that the agency’s evaluators engaged in a protracted review of the vendors’ VPAT submissions, during which they repeatedly sought additional information where they identified deficiencies or informational gaps in the VPATs. For example, after reviewing the initial VPATs, the evaluators summarized their conclusions, noting those areas where the vendors failed to address the informational requirements of the VPATs. The agency then sent clarification requests to both vendors requesting additional details in support of their claims regarding compliance. This process was repeated numerous times throughout the agency’s evaluation. The record also shows that the agency’s evaluation conclusions changed throughout this process in response to the information received from its requests for clarification. In short, GAO finds that, contrary to Dell’s assertions, the evaluators in fact performed a detailed evaluation of the VPATS, and the record adequately memorializes that evaluation.

Dell next asserts that the agency improperly assigned HP evaluation points for its workstation and 22-inch monitor under the software applications and operating systems criteria. According to Dell, since this acquisition does not include software, giving credit for section 508 compliant software was unreasonable. Dell maintains that, in contrast, it received no similar evaluation points because its quotation accurately characterized this standard as not applicable. Similarly, Dell maintains that the agency improperly assigned HP an extra evaluation point for quoting a 22-inch monitor that had a compliant touch screen or touch-operated controls, even though the agency is not acquiring such products. According to the protester, in both situations, the competitors should have been assigned a not applicable rating for these items.

GAO finds that the protester’s assertion is based on a premise that mischaracterizes the agency’s evaluation. The record shows that the VPATs were reviewed under numerous–and sometimes differing–regulatory categories, depending on the product in question. For example, the workstation VPATs were reviewed for compliance under 36 C.F.R. sections 1194.21, 1194.23, 1194.26, 1194.31 and 1194.41. Within each regulatory category, there were a discrete number of requirements; for example, under 36 C.F.R. sect. 1194.21, there were 12 requirements. However, there is no indication in the record that the agency assigned evaluation points under the various categories, or that it subsequently tallied points for purposes of evaluating the compliance of a given product with the section 508 standards. Rather, the record shows that the agency’s methodology was to assign a rating of supports to a component where all of the standards were rated as either fully supported or not applicable; that is, the evaluation made no distinction between a fully supported and a not applicable rating for purposes of determining compliance. The controlling consideration was whether a component received one or more ratings of partially supported for a category; in that case, the component automatically received a rating of partially supported for the category. Thus, the record shows that the agency’s ultimate evaluation conclusion would not have changed, even if the protester were correct that the agency improperly assigned HP’s workstation and 22-inch monitor supported rather than not applicable ratings for some of the requirements. It follows that there is no basis for GAO to question the evaluation in this area.

Dell asserts that the agency disparately evaluated the quotations regarding the RFQ requirement for information, documentation, and support for their products that would accommodate disabled workers. Dell claims that HP and itself met the requirement the same way–in the form of a toll-free number, available Monday through Friday during regular business hours, that would accommodate callers using telecommunications device for the deaf/teletypewriter (TDD/TTY) terminals (which are used by hearing and speech impaired individuals). Dell also asserts that both vendors offered information, documentation and support via their websites 24 hours a day. HP’s workstation, 19-inch monitor and 22-inch monitor were rated as fully supporting the standard, while Dell’s received partially supports ratings under 36 C.F.R. sect. 1194.41. Dell maintains that these disparate evaluation conclusions were unreasonable given that the two vendors quoted identical approaches.

GAO finds that this argument is without merit. While Dell may have quoted the same toll-free number approach as HP, the record shows that this aspect of the quotations was not the reason for the disparate ratings in this area. The agency evaluated the vendors’ websites under 36 C.F.R. sect. 1194.22 to determine whether they supported the section 508 standards. The vendors’ VPATs and the agency’s evaluation conclusions show that HP’s website was rated fully supports for all 16 requirements under 36 C.F.R. sect. 1194.22, whereas Dell’s was rated fully supports under only six of the requirements and partially supports under five Consistent with its evaluation methodology, the agency therefore rated HP’s website as fully supports and Dell’s as partially supports.

In rating the vendors’ other offered components, the agency assigned fully supports ratings to the HP products under 36 C.F.R. sect. 1194.41 because HP quoted TDD/TTY terminals and a website that had been determined to fully support the section 508 standards. In contrast, when rating Dell’s other components, the agency assigned partially supports ratings to Dell’s workstation and 22-inch monitor under 36 C.F.R. sect. 1194.41 because, although Dell also quoted TDD/TTY terminal support and a website, its website had been rated only partially supports.This evaluation conclusion was unobjectionable; since the Dell website did not fully support the section 508 standards, and the remaining products were dependent on that website to provide prospective users with the information, documentation and support, the agency reasonably concluded that Dell’s components warranted a partially supports rating.

Dell asserts that the agency misevaluated its workstation when it conducted its hands-on test for purposes of determining whether the workstation was compatible with the SSA accessibility standards (the JAWS and MAGic software applications). The RFQ required vendors to supply workstations that had operating system software already installed, but the agency installed the JAWS and MAGis software applications prior to conducting the hands-on testing. The agency found that the Dell workstation did not perform as well as HP’s when these applications were run. According to Dell, its and HP’s workstations employ the same [deleted], and therefore should have performed more or less identically; it thus infers that there had to be a problem with the agency’s installation of the JAWS and MAGic software applications on its workstation, or that the agency must have configured its workstation incorrectly prior to conducting the hands-on test.

This argument is without merit. First, Dell has not asserted or demonstrated that, even though its workstation and the HP workstation have certain components in common, they are configured identically, such that identical test results necessarily would be expected. HP points out, for example, that differences in other system components, firmware, or other hardware configuration questions leave open the possibility that the two workstations would perform differently. Further, there is no other evidence supporting Dell’s inference that the performance of its workstation during the hands-on test was attributable to errors on the part of the agency in installing the JAWS and MAGic software applications, or in otherwise configuring its workstation prior to the test.

In any case, the record shows that, ultimately, the agency’s observations during the hands-on test resulted in its merely concluding that there was a difference in performance between the two workstations, not that the Dell product was technically unacceptable. In this respect, the record includes an e-mail chain that began with an email from the head of the testing group to several other people in the agency. In response to that e-mail, one of the agency’s procurement officials stated: It is unclear whether the report below proposed to fail the Dell 755, but the way I interpret the comments, it is a performance issue and not a failure. Likewise, there is no indication that the agency considered the hands-on test results for Dell in either the section 508 compliance findings, or in the source selection decision itself. In the final section 508 compliance evaluation report, there is no mention of the results of Dell’s test results, and there is only a passing reference to HP’s results. These conclusions are repeated verbatim in the source selection decision. It thus does not appear that the test results were used as a discriminator in the award decision. The protest is denied.

Protest that agency unreasonably discontinued negotiations under a Broad Agency Announcement is denied, where the agency reasonably determined, after four months of negotiations, that the parties could not reach agreement on contract terms concerning intellectual property rights.

General Counsel P.C. Highlight:

Spaltudaq argues that the agency failed to engage the firm in meaningful discussions. More specifically, it complains that it was misled about the agency’s requirements regarding intellectual property rights, and denied a fair and reasonable opportunity to correct proposal deficiencies that led to the agency’s decision to terminate negotiations. The protester asserts that the requirement for meaningful discussions, as articulated in Federal Acquisition Regulation (FAR) part 15, applies to the evaluation of proposals under a BAA. GAO states that it is true that in prior cases it has looked to FAR part 15 for guidance in reviewing the agency’s conduct of discussions under a BAA when an agency uses negotiated procedures as part of the selection process, in which case the discussions must be meaningful.

Here, however, the negotiations that occurred between Spaltudaq and the agency were not part of the evaluation and selection process, but occurred after the evaluation had been completed and Spaltudaq’s proposal had been selected for award. Thus, the requirement for meaningful discussions as stated in FAR part 15, and in the cases interpreting that part, does not apply. That is not to say that the agency’s conduct of post-selection negotiations under a BAA is not reviewable. Although GAO finds that DTRA had no obligation to follow the specific requirements for discussions set forth in FAR Part 15, agencies may not conduct themselves in an arbitrary manner, and they must negotiate in good faith and in a manner consistent with the BAA.

The BAA provided for post-selection negotiations with firms that were selected for award. The BAA permitted the agency to discontinue discussions if an offeror failed to provide necessary information in a timely manner, or if the parties failed to reach agreement on contract terms within a reasonable time. Here, the record shows that over a four-month period, the parties engaged in good faith negotiations in an attempt to reach agreement over the parties’ rights to intellectual property, but that no agreement could be reached. The record shows that Spaltudaq proposed a number of approaches that limited or restricted the government’s rights, and the agency repeatedly objected to these approaches. The agency articulated its final negotiation position regarding intellectual property in its August 7, 2008 letter and unambiguously stated that the Government is unwilling to consider recent proposal changes that would limit or restrict the government’s rights to data or inventions. Despite this admonition, Spaltudaq responded with a revised statement of work that included previously submitted proposal revisions to restrict the intellectual property rights granted to the agency. In GAO’s view, the agency reasonably determined that the parties had failed to reach agreement within a reasonable time, and the agency could discontinue negotiations on this basis alone.

The protester contends that it was misinformed about the agency’s intellectual property requirements, specifically with regard to Spaltudaq’s I-STAR platform. The protester asserts that, in revising the statement of work, it only intended to clarif[y] that that developments and improvements to the I-STAR platform would be excluded from the scope of work, as a result of Spaltudaq’s belief that the agency was not interested in this platform. The protester asserts that the agency’s August 7, 2008 final negotiation position letter did not prohibit the revisions that Spaltudaq proposed, and that DTRA’s counsel led Spaltudaq to believe that the proposed clarification would not be objectionable, and would likely be acceptable, to DTRA. However, the contemporaneous record does not support Spaltudaq’s arguments.

While the record shows that there were several communications between the agency’s counsel and Spaltudaq’s counsel concerning the I-STAR platform and related work, the record does not evidence that the agency or its counsel ever agreed to exclude from the scope of work future developments and improvements to the I’STAR platform, or agreed to Spaltudaq’s proposed funding allocation approach to exclude subject inventions. Even if the agency or its counsel had indicated a willingness to consider such provisions, DTRA’s August 7 letter made clear that such revisions would no longer be considered. As stated above, the agency’s final negotiation position was that the government is unwilling to consider [Spaltudaq’s] most recent proposal changes. The fact that Spaltudaq chose to ignore the agency’s warnings does not require the agency to reopen negotiations here. The protest is denied.

A bidder’s failure to precisely follow instructions in invitation for bids for construction project with respect to how to enter bid prices for deductive bid items can be corrected as an obvious clerical mistake where the intended bid is evident from the face of the bid.

General Counsel P.C. Highlight:

SDV contends that the agency improperly permitted JRS to correct its bid from its alternate #2 bid amount of $1,055,750 to the award price of $8,104,376. GAO states that under FAR sect. 14.407-2, the contracting officer may correct apparent clerical mistakes in bids, so long as the contracting officer obtains from the bidder a verification of the bid intended. GAO has recognized that a bidder’s failure to follow IFB instructions precisely with respect to how to enter bid prices for deductive bid items is an obvious clerical mistake that can be corrected where the intended bid is evident from the face of the bid.

Here, it is clear from the face of JRS’s bid that it mistakenly inserted the amount that it intended to deduct from the base bid in the deduct alternate items on the bidding sheet rather than inserting the net amount after the deduction. As noted, the agency verified the intended bid with JRS. While SDV notes that the agency initially determined that this was a minor informality that was waivable under FAR sect. 14.405 instead of a clerical error correctable under FAR sect. 14.407-2, the record here demonstrates that the error was a correctable clerical error and that the agency complied with FAR sect. 14.407-2 in correcting the bid. The protest is denied.

Consideration of innovations and/or creative approaches in proposals’ responses to solicitation requirements did not constitute reliance on an unstated evaluation criterion where solicitation provided for relative weighting of evaluation factors in the evaluation rather than review for acceptability alone.

Protest that price/technical tradeoff was improperly based on price where technical factors were to be more important than price is denied where the record shows that the contracting officer reasonably determined that the price premium associated with the higher-rated proposal was not warranted, given the level of technical competence available at the lower price.

Protest that the source selection decision failed to consider the full range of the protester’s technical capabilities is denied where the record shows that the contracting officer conducted a comprehensive review of the technical proposals that supported the stated evaluation conclusions.

General Counsel P.C. Highlight:

ViroMed first alleges that the agency improperly considered an unstated evaluation criterion in evaluating its proposal, and that the agency’s source selection decision was based improperly on price and failed to consider the technical benefits of the technology it proposed.

With respect to the allegation that the agency improperly relied on an unstated evaluation criterion, ViroMed states that during its debriefing the agency informed it that, while its proposal met all requirements of the solicitation under the technical approach factor, it had not included any innovations or excesses, and therefore received an acceptable rather than highly acceptable rating for technical approach. ViroMed contends this represents an agency admission that it relied on innovations as a technical factor in its award determination and thereby violated the requirement that an agency identify all major evaluation factors in the solicitation. GAO states that where, as here, a solicitation indicates the relative weights of evaluation factors, as opposed to providing for selection of the lowest-priced, technically acceptable proposal, the agency is not limited to determining whether a proposal is merely technically acceptable; rather, proposals may be evaluated to distinguish their relative quality by considering the degree to which they exceed the minimum requirements or will better satisfy the agency’s needs. With specific regard to the consideration of innovations and/or creative approaches to distinguish the relative quality of proposals, GAO has held that an agency can properly consider both the extent to which proposals exceed the RFP requirements and the extent to which offerors used innovative measures to respond to those requirements. Accordingly, under the circumstances here, the agency’s consideration of any innovations contained in a proposal’s response to the technical requirements does not amount to reliance on an unstated evaluation criterion.

ViroMed next argues that the agency’s price/technical tradeoff was based improperly on price where the RFP indicated that technical proposals would be more important than price. GAO’s review of price/technical tradeoff decisions is limited to determining whether the tradeoff was reasonable and consistent with the solicitation’s evaluation criteria. Notwithstanding a solicitation’s emphasis on technical merit, an agency may properly select a lower-priced, lower technically rated proposal if it decides that the cost premium involved in selecting a higher-rated, higher-priced proposal is not justified, given the acceptable level of technical competence available at the lower price.

The record in this case indicates that the contracting officer did not give undue weight to price in making the award decision. Rather, the record demonstrates that the contracting officer acted in accordance with the RFP’s direction that technical factors were more important than price, but concluded that CDD’s lower-priced, lower-rated proposal represented the best value to the government. As noted above, while CDD’s proposal was rated equal to ViroMed’s proposal under the technical approach, corporate experience, and past performance factors, and higher than ViroMed’s proposal in socio-economic plan, ViroMed in fact was ranked first technically on the basis of the contracting officer’s independent judgment that ViroMed’s corporate experience and past performance were superior to CDD’s, despite the equal, highly acceptable, technical ratings. In making the selection decision, however, the contracting officer, after recognizing that the RFP specified that the evaluation of proposals considers the offeror’s technical proposal more important than the offeror’s price proposal, determined that the technical superiority of ViroMed’s proposal cannot be offset by the overall price differential of $4,965,179.50 or 13.46% that exists between ViroMed and CDD. Given that under the RFP here it was within the contracting officer’s discretion to decide that the price premium involved in selecting ViroMed’s higher-rated, higher-priced proposal was not justified in light of the acceptable level of technical competence available at CDD’s lower price, GAO sees no basis to conclude that the contracting officer’s decision here was inconsistent with the RFP or otherwise unreasonable.

Finally, ViroMed asserts that the agency’s source selection decision was unreasonable because the record does not demonstrate that the contracting officer considered the full range of ViroMed’s technical capabilities in making the determination that its proposal was not worth the price premium over the CDD proposal. Specifically, ViroMed alleges that the agency’s source selection decision unreasonably failed to consider the technical benefits of its proposed testing system, including mitigation of false positive test results due to cross contamination, which ViroMed asserts is a concern associated with the highly sensitive HIV screening tests required by the solicitation. GAO states that an agency need not address each and every feature of a proposal in documenting a source selection decision, but must show only that its evaluation conclusions are reasonably based.

Here, the SSDM demonstrates that the contracting officer thoroughly and independently reviewed the offerors’ proposals, and made specific comparisons to differentiate between the two proposals. For example, under the corporate experience and past performance factors, the SSDM notes that ViroMed had performed testing services virtually identical in scope and complexity to that required by the RFP, and had done so in volumes that exceeded the RFP requirements to a greater degree than had CDD, which resulted in ViroMed being ranked first technically. Under the corporate experience and past performance factors, however, the contracting officer noted that: “this greater magnitude or volume of testing in and of itself does not attribute to ViroMed’s technical superiority. With increasing automation, clinical laboratory testing has achieved greater scalability over the years. This is demonstrated by the fact that both ViroMed and CDD have exceeded the magnitude requirements of the solicitation . . . thereby demonstrating that both offerors possess the requisite instrumentation, personnel, management skills, pre/post analytical and quality assurance protocols, etc. to successfully perform the requirements of the solicitation.”

With regard to technical approach specifically, the technical approach factor under the RFP encompassed far more than an evaluation of each offeror’s proposed testing systems. In this regard, the SSDM demonstrates that in evaluating each offeror’s proposed technical approach, the contracting officer, consistent with the RFP and SSP, considered: (1) how the offerors intended to maintain facilities, automated data processing services and data transmissions at the level of security required for Department of Defense networks; (2) how they intended to secure electronic data transfers using an approved encryption standard that meets federal security guidelines; (3) the specific technology and resources, and the extent of automation they proposed to meet the high volume testing requirements of the RFP; (4) how they intended to successfully accomplish the required shipping transportation services for specimens from locations both within and outside the United States; (5) the specific tests and test manufacturers they proposed to use to accomplish each test required by the solicitation; and (6) the labor mix and quantity of personnel they proposed to use to accomplish the requirements of the RFP.

Concerning ViroMed’s specific allegation that the agency failed to consider the technical benefits of its proposed testing system, the record shows that the contracting officer did specifically discuss that testing system, [DELETED], in the SSDM. The contracting officer noted that [DELETED] would provide the same quality control features and the same operating capabilities as currently in place, but would result in much more cost efficiencies. However, after a detailed review of the six areas of each offeror’s technical approach, including each offeror’s proposed testing system, the contracting officer concluded that the only excesses that existed among each of the offerors’ revised Technical Approaches was their CAP accreditation. Contrary to ViroMed’s assertion that the contracting officer’s conclusion indicates a failure to consider the full range of ViroMed’s capabilities, the record shows that the contracting officer thoroughly reviewed the offerors’ technical approaches and concluded that of the technical features proposed by the two offerors, only the CAP accreditation exceeded the RFP requirements. The protest is denied.

Protest that contracting agency unreasonably evaluated quotation as technically unacceptable is denied where the record shows that the evaluation was reasonable and consistent with the solicitation’s evaluation criteria.

General Counsel P.C. Highlight:

Convergys argues that the agency unreasonably interpreted its quotation with respect to the 60-day transition requirement and, thus, improperly rejected it as technically unacceptable. The protester contends that its ramp completion date of November 24 should have been considered the end date of its transition period. In this regard, Convergys contends that the tasks set out in its phase-in plan that were to take place after the date of ramp completion, concluding with its Project Management Transition to Operations on December 3, should have been considered post-transition period activities. GAO states that a vendor has the burden of submitting an adequately written response to the solicitation. A proposal or quotation that fails to conform to material terms of the solicitation should be considered unacceptable. A review of the record here shows that the agency’s evaluation of the protester’s quotation was reasonable.

Vendors were to provide a detailed demonstration that their intended phase-in plans would be completed within 60 days of award; firms were specifically instructed that mere statements of a firm’s intent to comply with this requirement would be insufficient. A review of the record confirms the reasonableness of the agency’s evaluation of the protester’s quotation based on its interpretation that each one of the three detailed implementation timelines provided by Convergys shows a transition period lasting 70 days from award.

Each timeline stated that the project start and finish dates for the phase-in plan extended from September 24 to December 3, a period of 70 days, and each timeline listed tasks as transition activities (under each timeline’s subject heading for transition-related work) that extended until December 3, including project management transition to operations. While, as noted above, the quotation included general statements of the firm’s intent to comply, the quotation’s specific references clearly indicated that the protester’s intended phase-in plan would not comply with the RFQ’s material 60-day transition period requirement. Accordingly, given the conflicting information in the Convergys quotation, GAO sees no basis to question the agency’s evaluation of the quotation, or the resulting rejection of the quotation as technically unacceptable under the terms of the RFQ.

The protester also contends that under the terms of the RFQ here, it should have been allowed to clarify the quotation’s perceived failure to meet the 60-day transition requirement, since, according to Convergys, it was merely a minor irregularity or clerical mistake in its quotation. Given that any revisions to the quotation in this area would be for the purpose of making the quotation technically acceptable, GAO does not agree that the quotation’s failure unequivocally to meet the 60-day transition requirement is a minor irregularity or clerical error for which the RFQ provided clarifications would be conducted.

Convergys also argues that the agency conducted unequal evaluations and clarifications with Lockheed Martin. Specifically, Convergys suggests that unequal evaluations occurred in that Lockheed Martin’s quotation indicated that it planned to perform two transition tasks beyond the 60-day transition period; however, it is clear from the RFQ that the referenced tasks are required to be completed within a 90-day period (not a 60-day period as the protester alleges), and Lockheed Martin’s quotation complied with this requirement. Convergys further argues that since the agency engaged in clarifications with Lockheed Martin, it should have done the same with Convergys. The record shows that the agency allowed Lockheed Martin to clarify a minor pricing aspect of its quotation; under the terms of the RFQ here, this clearly fell within the provision regarding clarifications. In contrast, as discussed above, any opportunity to address the issues in the Convergys quotation regarding compliance with the 60-day transition plan requirement would not have constituted clarifications under the RFQ. Accordingly, there clearly is no support in the record for the protester’s contention that it and Lockheed Martin were treated differently in this regard under the terms of the RFQ. The protest is denied.

Protester’s contentions that three agency procurements for brand-name filters improperly limit competition are denied where the record shows that the agency is procuring the brand-name items using simplified acquisition procedures and has adequately justified the use of its brand-name approach under the procedures applicable to simplified acquisitions.

Protester’s contention that a fourth agency procurement for brand-name filters improperly limits competition is sustained where the procurement history information set forth in the solicitation shows that the value of the requirement is likely to exceed the applicable simplified acquisition threshold of $100,000; accordingly, the streamlined procedures applicable to simplified acquisitions cannot be used for this requirement.

General Counsel P.C. Highlight:

Although CPF filed separate protests challenging the terms of each of these RFQs, the protests all raise the same issue, in essentially identical arguments. CPF argues that FAR sect. 11.104(b), which governs use of brand-name-or-equal purchase descriptions, bars DLA from conducting a procurement for brand-name items without setting forth salient characteristics that would permit broader competition. More broadly, CPF argues that DLA has no basis to limit these procurements to the brand-name items. GAO states that in reviewing DLA’s obligations in this situation, GAO looks first to Part 13 of the FAR, which establishes the procedures for simplified acquisitions. These simplified procedures are designed to promote efficiency and economy in contracting, and to avoid unnecessary burdens for agencies and contractors, where, in cases like these, the value of the acquisition is less than $100,000. In simplified acquisitions, agencies are only required to obtain competition to the maximum extent practicable. In a simplified acquisition, an agency can limit a solicitation to a brand-name item where the contracting officer determines that the circumstances of the contract action deem only one source reasonably available (e.g., urgency, exclusive licensing agreements, brand name or industrial mobilization). In such cases, GAO reviews protests of sole-source determinations–and, as here, the decision to limit the procurement to a brand-name–for reasonableness.

For three of the RFQs, DLA has demonstrated a reasonable basis for using a brand-name specification for these filters. CPF asserts that DLA has no basis for limiting the solicitations to brand-name items, disputes the DLA’s reliance on its database to furnish a justification for a brand-name procurement, and contends that the database is merely descriptive of previous procurement experience; its arguments provide no basis to sustain the protests. A contracting officer may rely on prior procurement history in the conduct of market research. DLA has advised GAO, and the record supports its claim, that DLA does not have sufficient data to consider alternatives to the brand-name items. Under these circumstances, and particularly the fact that these procurements are properly valued at less than $100,000, the FAR permits a streamlined approach to procuring these items. Therefore, in GAO’s view, the protest record for the challenges to RFQs supports the agency’s brand-name only approach.

However, as noted above, RFQ SPM7L4-09-U-A006 provides an estimated quantity of 1,356 filters over the two-year term of the indefinite-delivery purchase order (IDPO). At the lowest historical price listed in the RFQ, the value of this requirement is more than double the simplified acquisition threshold. Since, in GAO’s view, neither CPF nor DLA had adequately addressed the implications of this aspect of the record, GAO asked both parties to address whether DLA’s explanation for its actions was consistent with the requirements of the FAR for requirements of this magnitude–that is, greater than $100,000. In response, DLA argues that the IDPO does not obligate the government to purchase the estimated quantity, and in fact limits purchases to $100,000. DLA argues that this approach is approved by the Defense Supply Center Columbus Acquisition Guide (DAG). In its submission, CPF continued its arguments that the record here shows that the agency has failed to conduct proper acquisition planning.

Although DLA argues that its actions are consistent with the statutes and regulations applicable to simplified acquisitions, the use of these procedures must be based on a reasonable expectation that the value of the requirement is at or below the simplified acquisition threshold. Where an agency uses simplified acquisition procedures to meet requirements that should reasonably be valued above the simplified acquisition threshold, our Office will sustain the protest. GAO sees no basis for DLA’s approach of using simplified acquisition procedures where its estimated requirement for these filters cannot reasonably be expected to fall within the applicable threshold ($100,000) for a simplified acquisition of this nature. Although DLA responds that the use of simplified acquisition procedures is appropriate here because it limits the purchase under each of these IDPOs to $100,000, regardless of the value of the estimated quantity, GAO think DLA is, in essence, splitting these orders to allow the use of simplified acquisition procedures, which is expressly barred by FAR sect.13.003(c)(2). Under this provision, agencies are advised: “Do not break down requirements aggregating more than the simplified acquisition threshold . . . into several purchases that are less than the applicable threshold merely to– (i) Permit use of simplified acquisition procedures.”

In GAO’s view, DLA is using the streamlined features of simplified acquisitions where the solicitation on its face demonstrates that the use of those procedures is improper. Indeed, DLA’s experience under the resulting IDPO demonstrates this point: less than one month after issuance of the IDPO (which the RFQ described as having a maximum term of two years), DLA had already reached the $100,000 ceiling. In addition, the procurement history for this part, and the estimated quantity identified in the solicitation, strongly suggest that DLA will make additional purchases to meet its continuing needs. GAO therefore sustains this protest. The protests challenging RFQs SPM7AX-08-X-0508 and SPM7MC-09-T-0468 are dismissed. The protests challenging RFQs SPM7M1-08-U-J179, SPM7MC-09-T-0151, and SPM7M3-08-T-K838 are denied. The protest of RFQ SPM7L4-09-U-A006 is sustained.

Protest challenging agency’s proposed corrective action in response to an earlier protest is denied where the record shows that the agency’s corrective action– revising the solicitation, obtaining revised proposals and making a new source selection decision–is necessary in order for the agency to make award for its actual requirements.

General Counsel PC Highlight:

Naval Systems, Inc. (NSI) protested the proposed corrective action contemplated by the agency in connection with its acquisition of various program and life cycle management and support services for the presidential helicopters program office. An initial task order award to NSI was protested, and the agency announced it would take corrective action by amending the solicitation, obtaining and evaluating revised proposals, and making a new source selection decision. NSI objected to a significant decrease in the estimated level of effort from that contemplated by the solicitation, as well as a requirement that appropriate contractor personnel be required to obtain Yankee White access within a certain period after issuance of a task order.

The GAO found no basis to object to the agency’s corrective action, noting that the general practice is for an agency to amend a solicitation (or issue a new one) when it discovers that its requirements have materially changed such that the original solicitation no longer reflects its needs. The GAO found that a 35% change in the level of effort provided an adequate basis for the agency’s proposed corrective action of amending the RFP. Although the level of effort in the solicitation was for informational purposes only, offerors relied on that estimate in preparing their proposals and were therefore prejudiced because they were led to formulate their proposed staffing approaches and costs in a manner that did not actually meet agency needs. The GAO also found reasonable the corrective action regarding Yankee White access, rejecting NSI’s argument that offerors knew from other solicitation provisions that Yankee White access would be required. The GAO pointed out that, absent an amendment to the RFP, there would be no enforceable contractual requirement for the awardee to obtain Yankee White access for its personnel.

Agencies have broad discretion to determine the scope of corrective action taken to ensure fair and impartial competition. The GAO will generally not object to any particular form of corrective action, so long as it is appropriate to remedy the issues which caused the agency to take corrective action in the first place. Corrective action often takes the form of amending the solicitation to correct the provisions which may have led to the protest in the first place. If an offeror is adversely affected by the agency’s decision to take corrective action, a protest of the nature of the corrective action is unlikely to be successful, and the offeror should focus on preparing a new or revised proposal which satisfies the new requirements.

Requirement in a solicitation for logistics training for mariners,that proposals include the resumes and signed employment letters of intent for key personnel, is unobjectionable, where the agency has provided a reasonable explanation for the requirement.

General Counsel PC Highlight:

Maritime Institute Inc. protested the terms of an RFP for logistics training services for civilian mariners. The RFP, issued as a small business set-aside, contemplated award on a best value basis, considering technical, past performance, and price evaluation factors. The RFP also provided minimum qualifications for 13 “Key Personnel” positions, and required proposals to include information demonstrating that the proposed key personnel meet these minimum qualifications. Maritime Institute objected to the RFP requirement that offerors submit signed letters of intent, and the resumes of, the individuals proposed as key personnel.

The GAO declined to find that the key personnel requirements were unduly restrictive on the competition. It found reasonable the agency’s justification that the evaluation of the proposed key personnel is a major component of the technical evaluation, and that the resumes provide a means for evaluating whether offerors have proposed key personnel who meet or exceed the requirements.

While a prospective offeror may find that certain requirements within the RFP restrict its own ability to compete for award, it must be able to demonstrate to the GAO that the restrictive requirement is not necessary to satisfy the agency’s legitimate needs. If the agency can reasonably justify the restrictive requirement, the GAO is not likely to sustain a protest of the terms of the RFP.

Protest challenging an agency’s evaluation of technical and cost proposals and selection decision is denied where the record shows that the agency’s evaluation and selection decision were reasonable and consistent with the terms of the solicitation.

General Counsel PC Highlight:

KinetX Aerospace, Inc. protested the issuance to Vector Planning & Services, Inc. (VPSI) of task order for systems engineering support services. The RFP, issued to small business holders of SeaPort-e MACs, provided for award on a best value basis considering cost and the following non-cost factors in descending order of importance: organizational experience, management approach, personnel qualifications, and past performance. The SSA selected VPSI’s higher-priced proposal for award, finding that the additional benefits offered by VPSI outweighed the approximately $9.7 million difference in the offerors’ evaluated probably costs. In particular, the SSA noted the difference in the two firms’ ratings under the most important organizational experience factor.

KinetX argued that each of the minor strengths assigned to its proposal should have been major strengths, and that the outstanding ratings VPSI received under the organizational experience and personnel qualifications reflect disparate treatment. The GAO found, however, that KinetX merely disagreed with the agency’s assessment of the overall merit of its proposal, and that it failed to identify any information in its proposal that the agency failed to consider or factual errors made by the agency in considering its proposal. The GAO pointed out that the record showed that the TEB recognized KinetX’s relevant organizational experience, assessing a major and eleven minor strengths, as well as one minor weakness. The GAO then disagreed that VPSI’s outstanding rating under the organizational experience factor reflected disparate treatment, finding instead that it reflected the TEB’s judgment as to the relative merits of the firms’ experience.

The GAO also found that the record did not support KinetX’s contention that the agency unreasonably rated its or VPSI’s proposals under the personnel qualifications factor. It disagreed with Kinetx’s assertion that the RFP provided for equally-weighted subfactors under this factor; rather, these “subfactors” were various requirements that key personnel were to meet or exceed. The TEB had reasonably found that VPSI proposed key personnel had a greater degree of extensive and specific experience than KinetX.

KinetX challenged several aspects of the agency’s evaluation of VPSI’s technical proposal, complaining that the agency assigned a number of major and minor strengths in VPSI’s proposal for the firm’s ability to transition to performance and maintain continuity of the program. The GAO disagreed that the RFP did not allow for considering an offeror’s ability to begin work under the task order, even if the RFP did not require submission of transition plans, because offerors were to show how proposed staffing would ensure the most effective and economical performance, including an approach for selecting, retaining, supporting and replacing personnel so as to minimize learning curve and ramp-up time.

The GAO rejected KinetX’s challenges to the agency’s cost evaluation, finding the agency’s adjustment of KinetX’s labor rates for future hires in certain labor categories to be reasonable. Based on reasonable market research, the agency had determined that KinetX’s proposed rates were not realistic, based on the small community of engineering expertise available. The GAO also found no merit to KinetX’s arguments regarding the agency’s alleged reduction in VPSI’s actual labor rates for nine employees during its cost realism assessment. The GAO noted that the summary table to which KinetX was referring to was in error, and that the detailed supporting documentation for the CEB’s cost realism evaluation showed that the agency did not reduce VPSI’s actual labor rates.

Disappointed offerors should always request a debriefing so as to better understand the process and reasoning behind the agency’s source selection decision. An offeror should compare each of the major and minor strengths and weaknesses to the evaluation criteria as provided in the RFP to ensure that the evaluation was conducted in concordance with the terms of the RFP. Although a disappointed offeror may believe that its proposal warranted higher evaluation ratings, the GAO is unlikely to sustain a protest objecting to lower evaluation ratings so long as they are reasonably in line with the evaluation criteria in the RFP

Protest that item offered by awardee cannot have met solicitation specifications merely because awardee offered item at lower price than protester fails to state valid basis of protest.

General Counsel PC Highlight:

Midwest Tube Fabricators, Inc. protested the issuance to E.W. Packing Corporation, Inc. (EWPC) of a purchase order for a quantity of bent, seamless, stainless steel tube. The agency initially issued two RFQs for quantities of tube, contemplating issuance of purchase orders to the vendors submitting the lowest-priced quotation for items conforming to the solicitation specifications. After both Midwest and EWPC submitted quotes for both RFQs, the agency combined the two RFQs and requested single quotations from each vendor. It then selected EWPC’s quote as being the lowest in conformance with the solicitation specifications. Midwest asserted that, based on EWPC’s lower price, the item offered by EWPC could not have met the solicitation specifications.

The GAO dismissed the protest, finding that Midwest’s claim that the item offered by its competitor fails to meet the specifications merely because it was offered at a lower price than Midwest was not a valid basis for protest. It rejected Midwest’s argument that the item cannot meet the solicitation requirements because, in prior procurements, the agency acquired the item at a higher unit price than that offered by EWPC.

In fixed-price contracts, an agency is permitted to accept low or below-cost offers, because the offeror bears the risk that its low price will not be adequate to meet the costs of performance. While a vendor may be disappointed that they were underbid by the competition, unless the solicitation provides for a price realism analysis, the agency may accept a low price so long as the item being acquired conforms to solicitation specifications.

Protest contending that award decision was unreasonable because awardee’s price was unrealistically low and the awardee lacked relevant past performance is denied, where solicitation did not require a realism analysis for this fixed-price contract and record shows that awardee possessed relevant past performance that agency reasonably evaluated.

General Counsel PC Highlight:

Global Protection Group, Inc. (GPGI) protested the award to AQuate Corp. of a contract for on-board security services for the Sea-Based X-Band Radar (SBX-1) vessel. Award would be made to the lowest-priced, technically-acceptable offeror, considering technical, past performance, and price evaluation factors. Prices would be evaluated to determine whether they were fair and reasonable; the RFP did not provide for a realism analysis. Award was made to AQuate, who offered a price approximately $10 million below GPGI.

The GAO found that GPGI’s protest that AQuate’s price was too low failed to state a valid basis for protest. Because the solicitation did not require a realism analysis, GPGI’s complaint that the agency should have performed on was not cognizable. The GAO also found that the record did not support GPGI’s contention that AQuate did not have relevant past performance.

In fixed-price contracts, an agency is permitted to accept low or below-cost offers, because the offeror bears the risk that its low price will not be adequate to meet the costs of performance. While a vendor may be disappointed that they were underbid by the competition, unless the solicitation provides for a price realism analysis, the GAO is unlikely to sustain a protest regarding the realism of the awardee’s price.

Protest of an agency’s technical evaluation is denied where the agency reasonably evaluated the awardee’s proposal consistent with the solicitation’s stated criteria.

Protest that the awardee’s price is too low under a solicitation that did not provide for a price realism evaluation does not provide a valid basis to question an agency determination that the awardee’s price was reasonable.

General Counsel PC Highlight:

A&T Systems, Inc. protested the issuance to American Systems Corporation of a task order for telecommunication and engineering support services. The RFTOP, issued to small business vendors holding contracts under the GSA Connection II MAC, contemplated award on a lowest-priced, technically-acceptable basis, considering technical capability, relevant technical experience, and price. In analyzing prices, the agency compared prices received to an IGE, and also calculated an overall average price based on the three proposals included in the competitive range. The agency determined that both A&T and American’s systems prices were reasonable, and made award to American Systems.

A&T contended that American Systems’ proposal should have been found technically unacceptable because its staffing plan was inadequate to perform the work, in large part because A&T believed that, as the incumbent, only its proposal featured the absolute lowest staffing composition and corresponding price still capable of satisfying the solicitation requirements. The GAO rejected A&T’s arguments, noting that the record documented a detailed evaluation of American Systems’ proposal under the RFTOP evaluation criteria and described the basis for the agency’s judgment that American Systems’ proposal as technically acceptable

A&T also asserted that the agency did not compare the vendors’ proposed prices to historical prices and did not ensure that American Systems’ lower price reflected its technical approach. The GAO found that A&T’s objection that American Systems’ overall price was too low did not provide a valid basis to question the agency’s price reasonableness evaluation. It pointed out that the RFTOP only provided for a price reasonableness analysis, which evaluates whether prices are too high, not a price realism analysis. The GAO then found no basis to conclude that the awardee took exception to the solicitation requirements based on its price proposal.

Incumbent offerors should be careful not to rely on their incumbency in preparing proposals. Although being the incumbent does provide certain competitive advantages, incumbency alone will not result in more favorable evaluation ratings. Incumbent offerors should still strive to offeror innovations and improvements upon their current performance so as to present an attractive offer to the government.

Cancellation of a FedBid buy after receipt of bids or quotations was reasonable, where the solicitation did not clearly inform vendors as to the nature of the procurement or the basis upon which award would be made.

General Counsel PC Highlight:

Kingdomware Technologies protested the cancellation of a FedBid buy order for emergency notification system services. The solicitation did not identify whether it was an IFB or RFQ, but vendors were informed that “bids” would be ranked by price, and that bid would be evaluated using criteria other than price. After receipt of bids/quotations, the agency asked firms a number of questions concerning the technical merits of their bids or quotations. Kingdomware protested, contending that it was entitled to award as lowest-priced bidder. The agency announced it would take corrective action by cancelling the solicitation.

Kingdomware contended that the solicitation was an IFB that provided for award to the lowest-priced bidder, which the agency countered that the solicitation was an RFQ that provided for award on a cost/technical tradeoff basis. Although the procurement more closely resembled a negotiated competition, the GAO concluded that cancellation was proper even under the more stringent standard applicable to IFBs after bid opening. Because vendors were not properly apprised of the basis upon which their submissions would be evaluated, the cancellation was reasonable.

The standards for cancelling a solicitation after receipt of bids or quotations differ. While an agency only needs to establish a reasonable basis to cancel an RFQ, it must offer a compelling reason to cancel an IFB after receipt of sealed bids. However, the GAO considers the basis by which submissions will be evaluated to be a fundamental requirement to a solicitation, and will support the cancellation of a solicitation lacking this provision.

Protest that an agency improperly awarded a contract to a firm whose sole owner was a federal government employee is denied where the record shows that the firm’s owner was not a federal employee at the time of award or thereafter.

General Counsel PC Highlight:

TranLogistics, LLC protested the award to The Rockhill Group, Inc. of a contract for the use, maintenance, and support of aircraft required for pilot and intelligence personnel training. The RFP, issued on a competitive 8(a) basis, provided for award on a lowest-priced, technically-acceptable basis. Rockhill had received the predecessor contract as a non-competitive 8(a) award through December 31, 2011, which was followed by an interim contract and extension. TranLogistics contended that Rockhill was owned by a federal government employee, and was therefore ineligible to receive a government contract.

The GAO denied TranLogistics’ argument that Rockhill was ineligible for award, finding that, although Rockhill’s owner had been a civilian employee of the agency from January 2011 to February 2012, he was not a government employee at the time of award. The GAO declined to consider complaints regarding Rockhill’s status as a small business and 8(a) concern, noting that these issues were properly before the SBA.

The GAO’s bid protest jurisdiction is generally limited to protests of the terms of a solicitation and recent awards of contracts. If a company believes that a firm has improperly received awards based on its eligibility under certain set-aside programs, jurisdiction is properly before the SBA. However, if that firm was ineligible due to its ownership by a federal employee, the company should notify the Inspector General offices of the agencies that had awarded contracts to that firm.

Protest that agency improperly awarded construction contract to firm whose state contractor’s license had been suspended is denied because possession of state license is a matter of responsibility, and therefore awardee was properly allowed to rectify its license status after proposal due date and did so promptly.

General Counsel PC Highlight:

Patriot Construction, Inc. protested the award to K.O.O. Construction, Inc. of a contract for storm drain expansion at the VA Palo Alto Healthcare System, Menlo Park Division, California. The RFP provided for award to the lowest-priced, technically-acceptable proposal, considering prime contractor’s project experience, project personnel experience, technical/management approach, past performance, copy of contractor’s license from the SDVOSB prime contractor, and price. After K.O.O.’s selection, Patriot provided the CO with information indicating that K.O.O.’s license had been suspended for failure to comply with an outstanding civil judgment. K.O.O. responded with a letter from the state indicating that K.O.O. had satisfied the judgment and that the state had no objections to reinstatement of its license, and then informed the agency that its license had been reinstated.

Patriot argued that K.O.O.’s FPR should have been considered technically unacceptable because its license was suspended at the time, and that K.O.O. had deceived the agency by submitting its license without stating that it was suspended. The GAO rejected these arguments, noting that whether an offeror lacks a required license is a matter of contractor responsibility, which is a matter left largely to the discretion of the CO.

The GAO will generally not consider objections to an affirmative determination of responsibility unless definitive responsibility criteria in the solicitation were not met or the agency unreasonably failed to consider relevant information in reaching a particular responsibility determination. In many procurements, the fact that an offeror does not possess a particular license at the time of proposal submission will not be grounds to reject their offer so long as they obtain the relevant licenses by the time of contract performance.

Protest challenging agency’s decision not to fund the protester’s proposal under phase II of the Department of Defense Small Business Innovation Research program is denied where there is no basis in the record to question the reasonableness of the agency’s evaluation.

General Counsel PC Highlight:

Pacific Blue Innovations (PBI) protested the agency’s determination not to award it phase II funding for a project PBI proposed under the DoD’s SBIR program. PBI had received a phase I award for a dual purpose hand grenade, and was invited to participate in the phase II proposal process. PBI’s first proposal was not selected. Its second proposal was selected for potential award, subject to the results of a Pre-Award Survey on Safety, Security and Accounting system; the pre-award survey recommended no award. The CO referred PBI to SBA for a certificate of competency, which the SBA denied. PBI requested to submit a third offer, which ranked last and was not selected for award.

The GAO found no basis on which to conclude that the agency’s evaluation of PBI’s proposal was unreasonable, noting that the agency documented numerous concerns regarding the overall design of the grenade as simply modifying the size, shape and venting of current designs. If found nothing unreasonable in the agency’s determination that PBI’s proposal failed to document that its proposed testing facility had been validated by a DoD organization. Concerns regarding PBI’s insufficient “proof of principle” also reasonably pertained to the soundness of PBI’s proposed concept, a matter expressly identified as a basis for evaluation under the first criteria.

The GAO also found reasonable the agency’s evaluation of PBI under the second and third criteria for phase II award. The agency had concerns about PBI’s lack of experience in hand grade design or any test data to support the design proposed, as well as to how PBI would organize and direct its various proposed subcontractors in order to mature and prove out the final design. With regards to the potential for commercialization, the agency saw risk in PBI’s design reliance on variations on known approaches, viewing the probability of success as not very high.

Agencies have broad discretion to determine which proposals will be funded under the SBIR program. So long as the agency’s determinations are consistent with the terms of the solicitation and in good faith, the GAO will not question their decision, subject to the test of reasonableness.

Protest that an agency improperly allowed awardee to cure its failure to acknowledge a solicitation amendment is denied where the amendment was not material because it did not impose new legal obligations on the bidders.

General Counsel PC Highlight:

Morris, Inc. protested the award to Road Builders, Inc. of a contract for dredging of the Oahe Emergency Spillway Inlet Channel in Pierre, South Dakota. The IFB was amended three times, and bidders were required to acknowledge amendments when submitting a bid. Road Builders submitted the lowest price, but failed to acknowledge amendment 3. The CO determined that amendment 3 was a minor informality, and that it was in the government’s best interest to accept Road Builders’ bid, provided that Road Builders verify its bid, acknowledge the amendment, and state that its pricing was not affected by acknowledging the amendment.

Morris argued that amendment 3 was material, and that Road Builders’ failure to acknowledge the amendment’s requirement for three-faced rip rap rendered its bid nonresponsive. The agency pointed out that the change was only a matter of form because the stone was required to be approximately rectangular in cross-section, which necessarily meant that the rip rap must have at least three fractured faces. The GAO found no reason to question the agency’s determination that amendment 3 simply clarified an existing requirement, and did not impose additional legal requirements.

Offerors are typically required to acknowledge amendments when submitting a bid; failure to acknowledge a material amendment is grounds to determine that a bid is nonresponsive. However, an agency may waive a bidder’s failure to acknowledge an amendment if it is not material. So long as the amendment did not impose any legal obligations on the bidder different than those imposed by the original solicitation, the agency may waive the requirement or allow the bidder to cure their failure to acknowledge.

Protest is denied where the agency reasonably concluded that the protester’s proposal was unacceptable and ineligible for award because it did not demonstrate that an individual proposed for a key personnel position had the experience required under the solicitation.

General Counsel PC Highlight:

Lamar Strong Associates, LLC (LSA) protested the award to Systems Kinetics Integration, Inc. (SKI) of a contract to provide subject matter expertise in information and tactical data systems, force modernization, equipment fielding processes, and information warfare, in support of the Office of the Deputy Chief of Staff for Programs. Proposals would be evaluated under technical, past performance, and price evaluation factors, with the technical factor having five equally-weighted subfactors. LSA was rated as unacceptable under the key personnel subfactor, based on the agency’s conclusion that the proposed individual did not meet the requirement to demonstrate a minimum of 10 years experience in contract management and managing force development related military duties.

The GAO found reasonable the agency’s determination that LSA’s proposal merited a deficiency under the key personnel subfactor and the overall technical factor because its proposed program/contract manager did not meet the minimum requirements for the position. The GAO rejected LSA’s interpretation of the RFP as allowing a combination of 10 years of contract management or management of force development. The GAO then declined to credit LSA’s proposed program/contract manager with additional experience based on several other work references. It noted that LSA’s proposal did not explain how tasks performed in these other positions, such as supervising or managing budgets, clearly related to contract management experience.

Offerors bear the burden of submitting well-written proposals that adequately address the requirements of the RFP. If an offeror proposes key personnel whose experience does not clearly fulfill the criteria of the RFP, the offeror should provide a detailed explanation relating the individual’s past work experience to the skills sought and tasks to be performed under the solicitation. The agency may consider less directly-related past performance if the offeror is able to demonstrate that the work performed is substantially similar to what that individual will be doing on the present contract.

Protester’s challenge to technical evaluation is denied where the weaknesses attributed to the protester’s technical submission were reasonably based.

General Counsel PC Highlight:

Laboratory Corporation of America (LabCorp) protested the establishment with Quest Diagnostics Nichols Institute of a BPA for laboratory testing services for Veterans Integrated Service Network (VISN) 6. Award was to be made on a best value basis, considering technical, past performance, and price. The RFQ provided a detailed chart summarizing 10 factors and related subfactors under the technical evaluation, the evaluation standard for determining whether a subfactor had been met, and the information pertaining to that subfactor that offerors should include in their proposals. The solicitation also provided a pricing schedule, for which offerors were to provide costs for various tests and well as optional courier service for specimen transportation.

The GAO first rejected LabCorp’s argument that Quest’s courier pick-up prices were unrealistically low, pointing out that the RFQ only provided for an evaluation of “total price,” and that the agency had found that Quest’s overall total price was realistic and in line with both LabCorp’s total price and the government estimate. The GAO also declined to object to Quest’s courier service pricing, finding that, since Quest itself proposed the amounts, they represented not less than what Quest regards as the fair market value of the services to be rendered.

The GAO also found without merit LabCorp’s challenges to the marginal ratings it received under its technical evaluation. It noted that LabCorp’s proposal failed to demonstrate full compliance with the requirement of the RFQ that the contractor ensure uninterrupted coverage with the specimen processor position. While LabCorp argued that it took only a limited exception to the requirement, the GAO found the very fact that LabCorp had included the conditions in its proposal showed that LabCorp believed them to have some significance. It also found that LabCorp’s statement that it “retains most specimens for 5-7 days” did not demonstrate compliance with the requirement that the contractor store specimens “a minimum of 7 days . . . .”

Offerors must ensure that their proposals comply with all the terms of the solicitation, and contain an unequivocal offer to perform. Imposing conditions or taking exception to a material solicitation requirement may limit a contractor’s liability to the government, or limit the rights of the government under the resulting contract. Such limitations will result in the rejection of an offer as nonresponsive.

In procurement conducted under two-phase design-build selection procedures, protest of agency’s decision to eliminate protester’s phase 1 proposal from further competition is denied where the record shows that the agency reasonably found the proposal technically unacceptable.

General Counsel PC Highlight:

Johnson Controls, Inc. protested its exclusion from phase two of a two-phase design-build competition, pursuant to FAR Part 36.3, for the construction of projects supporting energy conservation and the development of alternative energy. Phase 1 proposals were to demonstrate an offeror’s capability to successfully execute the design-build or construction task orders under the contract. The agency sought to select 12 proposals to compete in phase 2, evaluating the offers under three factors: organizational and technical approach (the most important factor); past performance; and evidence of bondability. Johnson Controls received a deficiency under the safety and risk element, for failure to provide required OSHA forms that would enable the agency to evaluate the firm’s history of work-related injury and incidence rates.

The GAO found that the agency reasonably assigned Johnson Controls’ proposal a deficiency for failure to submit the OSHA forms, reasonably determined that the proposal warranted an unacceptable rating on that basis, and reasonably excluded the firm from further competition. It noted that the RFP put offerors on notice that the agency intended to evaluated offerors’ history of work injuries based on the OSHA forms. Although firms were allowed to provide summaries of the OSHA form data, if specific incidents occurred, they were required to provide information on the incident and corrective action taken. Because Johnson Controls’ proposal identified 86 incidents during the time period in question, it could not merely provide a summary of the OSHA data.

Offerors bear the burden of submitting a well-written proposal, adequately detailed so as to demonstrate compliance with the material terms of the solicitation. Where specific licenses, regulatory forms, or other supplemental information is required to be attached to proposals, offerors must ensure that the information is included. Failure to provide all required information will result in the assessment of weaknesses, or the exclusion of the proposal from consideration all together.

Protest that source selection authority’s (SSA) selection decision was improper is denied where the record shows the SSA conducted an extensive examination of the qualitative merits of proposals in finding them essentially equal under two evaluation factors, and reasonably relied on a key discriminator under the third evaluation factor to make the selection decision.

General Counsel PC Highlight:

ERC Inc. protested the award to Barrios Technology, Ltd. of a contract for mission and program integration (MAPI) services for the International Space Station. The RFP, issued as a small business set-aside, provided for award on a best value basis, considering mission suitability, past performance, and cost/price. The mission suitability factor contained three subfactors, with technical approach and management approach being more heavily weighted than safety and health approach. In determining relevance of past performance, the agency would consider whether present or past efforts involved the same magnitude of effort and complexities involved here.

During the initial SEB presentation, ERC’s mission capability proposal had a modest point advantage overall, stemming from its better management approach. The SEB had found ERC and Barrios’ technical approaches to be essentially equal, but the SSA asked the SEB to provide more detailed qualitative information to help the SSA differentiate between the proposals. The SSA also asked for information regarding how constraints associated with ISS logistics might affect the weighing of relevance under the past performance factor. The additional information provided by the SEB led the SSA to conclude that Barrios offered more experience in the challenging environment of human spaceflight.

The GAO first considered ERC’s challenges to the SSA’s findings that the proposals were essentially equal under the mission capability factor and cost factors. It found wholly unsupported ERC’s allegation that the SSA acted in bad faith by exercising his judgment in disagreeing that certain strengths identified by the SEB were worth the weight assigned by the SEB. Although ERC had received higher adjectival ratings under the safety and health subfactor, the GAO noted that these ratings are merely guides for the SSA. The GAO also disagreed that the SSA had “downplayed” any price differential between ERC and Barrios, but rather considered it in the context of a procurement where the non-cost/price factors were significantly more important than cost/price.

The GAO found without merit ERC’s objections to the use of ISS logistics as a discriminator during the tradeoff decision. It found reasonable the agency’s characterization of various SOW provisions as involving ISS logistics, and therefore the agency’s consideration of ISS logistics was reasonably encompassed in the past performance evaluation factor. The GAO disagreed that, in light of a significant strength assigned to ERC under the management approach subfactor, the agency should not have found a risk in the area of ISS logistics.

In conducting a tradeoff decision, the agency has broad discretion to determine the manner and extent to which they make use of the individual evaluation ratings. Numerical, color, and adjectival ratings serve as guides to assist the agency in making its selection; the SSA will still consider the qualitative information underlying those ratings in making its decision. While a disappointed offeror may disagree with the evaluation ratings it received, it must demonstrate that its evaluation was not consistent with the terms of the solicitation for the GAO to sustain its protest.

An agency properly rejected a bid as nonresponsive where the bidder provided for completion of performance within 350 days after notice to proceed which would not satisfy the requirement that performance be completed by August 31, 2013.

General Counsel PC Highlight:

Cusack’s Masonry Restoration, Inc. protested the rejection of its bid as nonresponsive under an IFB for construction services at the agency’s Sault Ste. Marie, Michigan facility. The IFB provided that work shall commence within 10 days after the contractor receives notice to proceed, and must be completed no later than August 31, 2013. Block 11 of SF 1442 indicated that the performance period is mandatory. The protestor submitted a bid indicating that it would complete performance within 350 days from the date it received notice to proceed, but did not unequivocally agree to complete the work by August 31, 2013.

The GAO found that the protestor did not promise to complete the work by August 31, 2013. It noted that, under the protestor’s 350-day qualification, the agency would have needed to give notice to proceed by September 15, 2012, to ensure completion by August 31, 2012; award was not even made until September 18, 2012.

Bidders must ensure that they submit a bid which complies with all the material terms of the IFB. Providing for completion of the work within a specific number of days, rather than a specific date as indicated in the IFB, exposes the bid to the risk of being rejected as nonresponsive.

Protest challenging an agency’s decision not to set aside a procurement for service-disabled veteran-owned small businesses (SDVOSB) is denied where the agency concluded from its market research that it did not have a reasonable expectation of receiving proposals from two or more SDVOSBs capable of performing the required services.

General Counsel PC Highlight:

Crosstown Courier Service, Inc. (CCS) protested the terms of an RFP, issued as a small business set-aside, for medical courier and dry ice delivery services for the VA Salt Lake City (Utah) Health Care System (VASLCHCS) and several CBOCs in Idaho. In conducting market research on VIP prior to issuing the solicitation, the CO identified 63 SDVOSBs/VOSBs and 52 SDVOSBs under the applicable NAICS code, but the search identified only a single vendor in Utah (and none in Idaho). When she performed a second search several months later, that vendor was no longer listed in VIP. Because there were no SDVOSB/VOSB concerns in Utah or Idaho, where the majority of delivery sites were located, the CO determined that a small business set-aside was appropriate.

The GAO found that the agency’s market research and resulting set-aside determination were reasonable. While the RFP did not restrict competition to firms located in the geographical area of performance, the GAO found nothing unreasonable in the CO’s market research focusing on that area and the likelihood of whether firms from outside it would respond to the RFP. While CCS was currently performing similar services in Montana, it did not identify any other VIP-listed SDVOSB that would be interested in competing for the requirement.

The VA is required to consider setting aside all procurements for SDVOSBs or VOSBs prior to proceeding to a different set-aside or full and open competition. If the CO believes that offers will be received from two or more eligible SDVOSBs, and that award can be made at a fair and reasonable price, the requirement must be set aside for SDVOSBs. Eligible SDVOSB companies should obtain CVE verification and maintain up-to-date information in the VIP database, including all applicable NAICS codes. If a sources sought notice or RFI is issued, interested companies should reach out to other SDVOSBs to express interest to ensure that the agency identifies at least two eligible companies.

Protest challenging the evaluation of offerors’ prices is sustained where the agency failed to follow the solicitation criteria with regard to the application of a 5-percent royalty adjustment to the offerors’ total evaluated prices.

Protest challenging the evaluation of the awardee’s past performance is denied where the source selection authority’s decision to change the lower-level source selection evaluation board’s initial rating from neutral to satisfactory was reasonable.

Protest challenging the evaluation of the awardee’s production capability is denied where the solicitation did not require the agency to assess a higher risk rating for proposals that did not have existing facilities and equipment.

General Counsel PC Highlight:

Colt Defense, LLC protested the award to Remington Arms Company, LLC of a ID/IQ contract for a minimum of 10,000 carbines and a maximum of 120,000 carbines in any combination of multiple M4/M4A1 configurations. Award was to be made on a best value basis, considering production capability, price, past performance, and small business participation. The production capability factor was broken into four considerations: manufacturing facilities, key tooling and equipment, production approach, and quality management system.

The solicitation notified offerors that the technical data package for the M4/M4A1 carbines includes licensed technology for which the government must pay a royalty amount pursuant to a licensing agreement with Colt. The RFP indicated that offerors who did not own or have a license for the Colt technology would have their proposed prices increased by a 5% royalty rate.

The GAO agreed with Colt that the agency had failed to apply the 5% royalty adjustment to offerors’ prices in accordance with the solicitation’s price evaluation instructions. Colt argued that the agency improperly applied the royalty adjustment only to certain portions of the proposed prices, based on an undisclosed interpretation of the license agreement between the government and Colt. The agency had determined portions of the carbines that were proprietary to Colt, and applied the royalty rate to that percentage of the unit price in calculating the total evaluated price. The GAO found that, while the agency’s calculations may (or may not) accurately reflect the amount due Colt under the license agreement, the solicitation’s price adjustment provision provided no notice to offerors that the provision would be applied this way.

The GAO rejected the agency’s argument that Colt’s protest was an untimely challenge to the terms of the solicitation, on the grounds that Colt’s special knowledge of the licensing agreement created an ambiguity that obligated Colt to protest prior to the time for submitting proposals. The GAO found that the price evaluation provisions created a latent ambiguity, and that Colt’s objections were therefore timely.

The GAO denied Colt’s objections to Remington’s past performance evaluation, in which the SSAC had disagreed with the SSEB’s assessment of unknown confidence for Remington and increased its evaluation to satisfactory confidence. Finally, the GAO found that the agency had reasonably evaluated Remington’s production capability, disagreeing with Colt’s argument that the solicitation mandated a higher risk assessment for offerors without all of the facilities and equipment that will eventually be required.

If there is an ambiguity in a solicitation that is obvious on its face, prospective offerors are required to protest the terms of the solicitation prior to the time set for the receipt of proposals. However, if the ambiguity is latent, and only becomes apparent after the agency conducts evaluations, a protest will still be timely within ten days of award. Disappointed offerors should always request a debriefing so as to better understand the evaluation process. If the agency conducted the evaluation in a manner that does not appear to be consistent with a reasonable interpretation of the solicitation, there may be valid grounds for protest.

GAO will not resolve a dispute involving interpretation of a license agreement, even where the amount of the royalty fee under the agreement bears upon evaluation factors of the current solicitation, because this involves a matter of contract administration not subject to GAO’s review.

A price evaluation scheme included in a solicitation for weapons that accounts for technical data royalty fees that will be due if award is made to an offeror who is not the owner of the technical data is not objectionable, even though the royalty may not represent the ultimate royalty paid by the government under the terms of a technical data license agreement because the parties to the license agreement have not yet agreed upon the applicable royalty fee.

General Counsel PC Highlight:

Colt Defense, LLC protested the terms of an RFP for the production of a minimum of 10,000 carbines and a maximum of 120,000 in any combination of multiple M4/M4A1 configurations. The initial solicitation notified offerors that the technical data package for the M4/M4A1 carbines includes licensed technology for which the government must pay a royalty amount pursuant to a licensing agreement with Colt. The RFP indicated that offerors who did not own or have a license for the Colt technology would have their proposed prices increased by a 5% royalty rate.

A protest by Colt of an initial award to Remington Arms Company, LLC was sustained, on the grounds that the agency had departed from the RFP’s price evaluation criteria when it created its own undisclosed formula to apply the 5% royalty to only those portions of the M4/M4A1 carbine which it had independently determined were proprietary to Colt. In response, the agency amended the solicitation, setting forth the methodology for the evaluation of price with regards to the 5% royalty and requesting revised price proposals. Colt now objects to the revised price evaluation terms.

Colt argued that the agency’s royalty evaluation provisions no longer purport to include the actual royalty provided for in the license agreement and are therefore inconsistent with FAR § 27.202-2(b)(1). Colt argued that, because there is no agreed upon royalty amount between the government and Colt, the agency is not authorized to evaluate the royalty. The GAO declined to resolve a dispute involving interpretation of a licensing agreement, even where the amount of the royalty fee bears upon evaluation factors of the current solicitation. It found reasonable the agency’s method for accounting for the to-be-determined cost in determining the relative prices under the RFP, despite the remaining uncertainty as to the exact amount to be paid to Colt.

The GAO’s jurisdiction does not extend to matters of contract administration, which are properly within the discretion of the contracting agency and for review by the cognizant board of contract appeals or the Court of Federal Claims. Where a solicitation relies in part on the terms of a licensing or similar contract, the GAO will not intervene in disputes between the licensing company and the government. The GAO will only hear protests of the terms of the solicitation itself, and not the licensing agreement.

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